If the government reduces expenditure on goods and services by $30 billion, then aggregate demand
A) increases by $30 billion and real GDP increases.
B) decreases by more than $30 billion and real GDP decreases.
C) increases by more than $30 billion and real GDP increases.
D) decreases by $30 billion and real GDP decreases.
E) increases and potential GDP increases.
B
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If an industry has a Herfindahl index of 10,000, then
A. the industry is a single firm. B. it is perfectly competitive. C. it is considered a duopoly. D. it is considered an oligopoly.
Rationing through the price system
A. leads to an efficient use of available resources. B. leads to high prices. C. leads to an inefficient use of available resources. D. works only with government interference.
An increase in quantity demanded caused no change in the equilibrium price. Thus, demand must be
A. elastic. B. perfectly elastic. C. inelastic. D. perfectly inelastic.
John Maynard Keynes believed that the government should play a role in fighting both unemployment and inflation.
Answer the following statement true (T) or false (F)