In which industry or sector of the economy is output least likely to be affected by the business cycle?
What will be an ideal response?
agricultural commodities
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The basic idea behind the multiplier is that an increase in
a. GDP brings about an additional, larger increase in GDP. b. consumer spending causes a larger increase in investment spending. c. government spending causes a larger increase in tax revenues. d. spending will cause an even larger increase in equilibrium GDP.
Suppose Niampora, an island country, is the largest exporter of cotton in its region. A recent flood affected a large part of the country. Which of the following will be an impact of the flood on the supply curve of cotton?
a. The supply curve of cotton will shift rightward. b. The supply curve of cotton will shift leftward. c. The supply curve of cotton will become steeper. d. The supply curve of cotton will become flatter.
Pollution is a
a. problem that is entirely unrelated to the parable called the Tragedy of the Commons. b. problem that cannot be remedied with regulations or corrective taxes. c. negative externality that can be viewed as a public-goods problem. d. negative externality that can be viewed as a common-resource problem.
Distinguish economies and diseconomies of scale. How can the extent to which economies and diseconomies of scale explain the size and number of real world firms in an industry?
What will be an ideal response?