If the MPC increases in value, what will happen to the slope of the consumption function?
a. The slope will decrease and the consumption function will become flatter.
b. The slope will decrease and the consumption function will become steeper.
c. The slope will increase and the consumption function will become steeper.
d. The slope will increase and the consumption function will become flatter.
c
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Normal profit is a(n) ________ cost because ________
A) implicit; it represents the cost of not running another firm B) explicit; a firm must pay income taxes on its profit C) implicit; it represents the cost of economic depreciation D) accounting; wages are considered an explicit cost E) depreciation; the equipment the firm owns wears out over time
The ________ describes the relationship between the amount of labor employed and real GDP
A) production function B) production possibilities frontier C) Lucas Wedge D) inflation rate E) Okun Gap
In the economic way of thinking, the costs of a recession are predominantly
A) the costs of using money. B) the excessive costs of advertising in the face of persistent, falling demand. C) the costs of disappointed expectations and discoordination of plans. D) the costs associated with high nominal interest rates.
Which of the following statements is CORRECT?
A) When demand increases, both the price and the quantity increase. B) When demand decreases, the price rises and the quantity decreases. C) When supply increases, the quantity decreases and the price rises. D) When supply decreases, both the price and the quantity decrease.