In a simple macroeconomic model, replacing the assumption of exogenous investment with the accelerator theory of investment ________ the effect on equilibrium GDP of fiscal policy changes, and ________ the effect on equilibrium GDP of changes in
autonomous consumption. A) increases, increases
B) increases, dampens
C) dampens, increases
D) dampens, dampens
A
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Short-run aggregate supply is greater than long-run aggregate supply in the misperceptions theory if
A) the actual price level is greater than the expected price level. B) the actual price level equals the expected price level. C) the actual price level is less than the expected price level. D) output is less than its full-employment level.
The downward slope of the demand curve is attributed to:
a. the inverse relationship between price and quantity demanded. b. the direct relationship between income and quantity demanded. c. the direct relationship between price and quantity demanded. d. the inverse relationship between income and quantity demanded. e. the direct relationship between consumer preferences and quantity demanded.
Suppose that Burkina Faso, a nation in Africa, can produce cotton and medicinal plants and that the opportunity cost of producing one bale of cotton is two medicinal plants. Suppose that a neighboring nation, Togo, can produce those goods as well and that the opportunity cost of one bale of cotton is two medicinal plants. How would trade affect each country?
a. Burkina Faso will specialize in cotton while Togo will specialize in medicinal plants. b. Burkina Faso will specialize in medicinal plants while Togo will specialize in cotton. c. Two thirds of Burkina Faso's production will be in cotton while one third of Togo's production will be in medicinal plants d. Two thirds of Togo's production will be in cotton while one third of Burkina Faso's production will be in medicinal plants e. Nothing will change.
Suppose an industry has total sales of $25 million per year. The two largest firms have sales of $6 million each, the third largest firm has sales of $2 million, and the fourth largest firm has sales of $1 million. The four-firm concentration ratio for this industry is
A. 60 percent. B. 36 percent. C. 25 percent. D. 50 percent.