The major component of federal government consumption is spending on ________
A) Social Security, Medicare and Medicaid
B) foreign aid
C) capital goods, e.g. highways and schools
D) national defense
D
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A newly acquired microwave oven and a food processor will increase Chuck's productivity in the kitchen. Accordingly, he will
a. cook more and eat out less b. cook less and eat out more c. buy more ready-to-eat foods d. be more likely to hire a cook e. increase the quality of what he cooks but may or may not cook more
Assume that during the last several years, the annual rate of inflation was 4 percent and the annual growth rate of the money supply was 5 percent. During the last 12 months, however, the monetary authorities have increased the money supply at a 12 percent annual rate. The expected inflation rate for the next period will be
a. higher than 4 percent under the rational expectations hypothesis. b. 4 percent under the adaptive expectations hypothesis. c. higher than 4 percent under both the adaptive and rational expectations hypotheses. d. both a and b.
Figure 7-8
Of the graphs in Figure 7-8, which represents total cost?
A. 1 B. 2 C. 3 D. 4
When an industry supply curve increases enough to erase economic profits,
a. weaker firms exit the industry b. quantity demanded decreases, but only slightly c. all firms in the industry incur economic losses d. entry of new firms and expansion of existing firms stop e. marginal revenue increases