In a mixed closed economy:
A. government purchases and saving are injections, while investment and taxes are leakages.
B. taxes and government purchases are leakages, while investment and saving are injections.
C. taxes and savings are leakages, while investment and government purchases are
injections.
D. taxes and investment are injections, while saving and government purchases are leakages.
C. taxes and savings are leakages, while investment and government purchases are
injections
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If an individual buys only two goods and these must be used in a fixed relationship with one another (e.g., coffee and cream for a coffee drinker who never varies the amount of cream used in each cup), then
a. there is no substitution effect from a change in the price of coffee. b. there is no income effect from a change in the price of coffee. c. Giffen's Paradox must occur if both coffee and cream are inferior goods. d. an increase in income will not affect cream purchases.
A monopolistically competitive firm is producing an output level at which marginal revenue is less than marginal cost. This firm should __________ quantity and __________ price to increase profit or reduce losses
a. increase, increase b. increase; decrease c. decrease; increase d. decrease; decrease e. increase; not change
Which of the following is true?
A) Even when they are economically free, high-income countries have been unable to achieve high growth rates. B) Even when low-income countries adopt institutions and policies supportive of economic freedom, they are unable to achieve high growth rates. C) When low-income countries adopt institutions and policies supportive of economic freedom, they are able to achieve high growth rates. D) Even when they are economically free, low-income countries have been unable to achieve high growth rates.
Which of the following is eliminated when the economy's output is equal to full-employment GDP?
A. The MPC. B. The multiplier. C. Leakages and injections. D. The real GDP gap.