In the basic Keynesian model, an increase in transfer payments:
A. increases short-run equilibrium output.
B. increases potential output.
C. reduces short-run equilibrium output.
D. reduces potential output.
Answer: A
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According to the Aggregate Demand Aggregate Supply diagram, short-term, an anti-inflation policy creates:
A. higher output. B. higher unemployment C. lower inflation. D. higher inflation.
For the monopoly shown in the figure above, when it maximizes its profit the marginal cost is ________ per unit and the price is ________ per unit
A) $10; $30 B) $20; $20 C) $10; $20 D) $30; $20.
Other things being equal, when the money price of a good increases, its relative price
A. falls to zero. B. stays the same. C. decreases. D. increases.
Goods are allocated in a market system by price rationing.
Answer the following statement true (T) or false (F)