Economic theories, or models, enable us to predict and to give reasonable explanations regarding economic variables
a. True
b. False
Indicate whether the statement is true or false
True
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In a certain economy, the components of aggregate spending are given by: C = 100 + 0.9(Y - T) - 500rI = 150 - 1,000rG = 200NX = 50T = 100 Given the information about the economy above, what would be the impact on short-run equilibrium output of a one-percentage-point decrease in the real interest rate from 6 percent to 5 percent?
A. Short-run equilibrium output would decrease by 150 units. B. Short-run equilibrium output would increase by 150 units. C. Short-run equilibrium output would decrease by 1,500 units. D. Short-run equilibrium output would increase by 15 units.
Compared to earlier times, the period of the 1950s to the early 1960s was one characterized by
(a) temporary deficit spending of the government. (b) permanent deficit spending of the government. (c) temporary surplus spending of the government. (d) permanent surplus spending of the government.
Since marginal revenue is less than price for a monopolist, a monopolist maximizes profits by equating marginal revenue and marginal cost, not price and marginal cost.
Answer the following statement true (T) or false (F)
Real consumption tends to be
A) procyclical and less variable than real GDP. B) procyclical and more variable than real GDP. C) countercyclical and less variable than real GDP. D) countercyclical and more variable than real GDP.