Refer to Figure 13-2. Ceteris paribus, an increase in the expected future price level would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
B
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Economic theory suggests
A) social order is maintained only when people act in the public interest. B) as a rule, people cooperate more effectively when they're selfish compared to when they're generous. C) a great deal of effective cooperation can occur in the presence of minimal generosity and also without a great deal of government guidance and control. D) none of the above.
What is the intuition that an expansion of an individual's budget set represents a gain?
A) More options are preferred to less. B) Money is the root of all happiness. C) Information is power. D) Scarcity is avoidable with prosperity.
A firm that is a monopolist in the output market and a monopsonist in the input market
A) will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage. B) will restrict the level of output but not that of employment compared to the perfectly competitive case. C) will hire less labor but pay the same wage compared to the perfectly competitive case. D) will hire less labor and pay a lower wage compared to the perfectly competitive case.
Consider an economy that is in equilibrium with real GDP = $5,000 . MPS = 1/4 and MPI = 1/5 . What will be the new equilibrium level of income if planned investment spending increases by $500?
a. $15,000 b. $7,000 c. $6,111 d. $5,500 e. $5,000