The price a perfectly competitive firm receives for its output
A) is determined by the interaction of the firm and all of the consumers who buy from the firm.
B) is determined by the interaction of all sellers and all buyers in the firm's market.
C) will not change in response to changes in market demand and supply because the firm is a price taker.
D) will be lowered by the firm in order to sell more output.
Answer: B
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The simplified expenditure multiplier:
A. is calculated as 1/(1 ? MP). B. has a positive value. C. grows larger as the marginal propensity to consume increases. D. All of these are true.
In the Keynesian aggregate expenditure model, the equilibrium level of income is achieved when
a. actual saving equals actual investment. b. planned aggregate expenditures equal total output. c. consumption equals income times the marginal propensity to consume. d. the marginal propensity to consume equals planned output.
If the annual interest rate remains unchanged over the next two years, and the present value of $120 to be received one year from now is $100, what will $100 be worth two years from now?
A. $120 B. $140 C. $144 D. Uncertain. We need to know the interest rate.
In 2008, Zimbabwe ran out of locally produced Coca Cola and local Coke bottlers were not able to import the concentrated syrup needed to make Coke from the United States because they could not obtain U.S. dollars. A small amount of Coke was imported from
South Africa, but a single bottle sold for around 15 billion Zimbabwean dollars. Zimbabwe was experiencing rapid increases in the price level, which is known as A) stagflation. B) deflation. C) inflation. D) hyperinflation.