If people underestimate the effects of expansionary policy, an increase in the growth rate of aggregate demand will tend to increase real GDP:
a. in both the short run and the long run.
b. in the short run but not the long run
c. in the long run but not the short run.
d. in neither the short run nor the long run.
b
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A profit-maximizing perfectly competitive firm should hire workers up to the point where labor's marginal revenue product equals the wage rate
Indicate whether the statement is true or false
A downward shift in the consumption function can be caused by:
a. expectations of higher inflation. b. an increase in wealth. c. a lower price level. d. none of these.
If the demand for liquor is elastic and the supply of liquor is inelastic, when the government increases liquor tax, _____
a. most of the tax will be paid by the consumer b. most of the tax will be paid by the producer c. all of the tax will be paid by the consumer d. all of the tax will be paid by the producer e. the tax will be paid by the retailer
Richard's indifference curve for two goods (bread and butter) is L-shaped, whereas Kate's indifference curve for the same two goods is convex. We can infer that _____
a. Kate considers bread and butter to be perfect substitutes b. Kate considers bread and butter to be perfect complements c. Richard considers bread and butter to be perfect substitutes d. Richard considers bread and butter to be perfect complements