Refer to the above figure. If the economy is currently at point C, then an increase in taxes will lead to
A. a decrease in real GDP and a decrease in the price level.
B. a decrease in real GDP and an increase in the price level.
C. a decrease in the price level and an increase in real GDP.
D. an increase in the price level and an increase in real GDP.
Answer: A
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In average cost pricing, the natural monopoly would have to set price equal to
A) AFC. B) AVC. C) ATC. D) MC.
An inferior good is defined by an income elasticity less than 1
a. True b. False
In the equation of exchange, velocity of money increases when
a. Y increases without any changes in P and M. b. Y falls without any changes in P. c. M increases without any changes in P and Y. d. P falls without any changes in Y and M.
Refer to the information provided in Figure 23.4 below to answer the question(s) that follow.
Figure 23.4Refer to Figure 23.4. Which consumption function implies the smallest MPS?
A. C1 B. C2 C. C3 D. cannot be determined from the figure