The economy tends to be less stable with a __________ LM curve causing interest rates to be rather __________ to shifts in the IS curve
A) steeper; sensitive
B) steeper; insensitive
C) flatter; sensitive
D) flatter; insensitive
D
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Mary has $10 to spend each week on coffee, Qc and magazines, Qm. The price of a coffee is $1, and the price of a magazine is $2. Mary's budget equation is ________
A) Qm = 10 - Qc B) Qm + Qc = 20 C) $1 × Qc + $2 × Qm = $10 D) Qm = 10 - 2 × Qc
A monopolistically competitive firm maximizes profit in the short run by producing where
A) price is less than marginal revenue. B) price is greater than marginal cost. C) price is less than average revenue. D) price is less than marginal cost.
Total revenue
a. always increases as price increases. b. increases as price increases, as long as demand is elastic. c. decreases as price increases, as long as demand is inelastic. d. remains unchanged as price increases when demand is unit elastic.
In calculating GDP, the largest component of total expenditures is
a. consumption b. imports c. net exports d. investment