In this graph, the MPC is
A. .25.
B. .5.
C. .75.
D. 1.00.
B. .5.
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Once a monopolistically competitive firm innovates, it is likely that:
A. it will enjoy long-run profits. B. other firms will rush to create similar, highly substitutable goods. C. it will need government protection to earn enough to cover its R & D costs. D. None of these is likely to happen.
A customs duty is an example of a(n)
a. use tax b. payments tax c. excise tax d. transactions tax e. process tax
Speculative demand for money is a(n):
A. positive function of prices. B. inverse function of prices. C. positive function of interest rates. D. inverse function of interest rates.