Refer to Figure 21-2. Which of the following is consistent with the graph depicted above?
A) There is a shift from an income tax to a consumption tax.
B) The government runs a budget surplus.
C) New government regulations decrease the profitability of new investment.
D) An expected expansion increases the profitability of new investment.
Figure 21-3
C
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In the aggregate expenditures model, if aggregate expenditures (AE) equal $6 trillion and GDP equals $7 trillion, then:
a. inventory depletion equals ?$1 trillion. b. inventory accumulation equals $1 trillion. c. investment equals $1 trillion. d. investment equals ?$1 trillion.
A monopolist faces the least price-elastic demand curve because:
a. the consumers have only one place to buy the good. b. the monopolist produces a standardized product. c. the monopolist undertakes a huge expenditure to produce the product. d. the monopolist supplies to an insignificant portion of the market. e. the monopolist produces an absolutely necessary good having close substitutes.
In the short run, a firm should shut down its business if price is less than:
A. ATC. B. AR. C. MC. D. AVC.
Deficit spending boosts aggregate demand.
Answer the following statement true (T) or false (F)