Assume the marginal propensity to consume (MPC) is 0.75 and the government cuts taxes by $250 billion. The aggregate demand curve will shift to the:
a. right by $1,000 billion.
b. right by $750 billion.
c. left by $1,000 billion.
d. left by $750 billion.
b
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In a small European country, it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million
If the number of hours worked in the labor force does not change, what does this information tell you about the slope of the per-worker production function in this range? A) The slope is -2. B) The slope is 1/2. C) The slope is 2. D) The slope is 4.
Intellectual property rights provided by patent systems typically ________
A) provide tax incentives to encourage research and development B) allow for the depreciation of capital C) compensate the government for building infrastructure D) last about twenty years
Vertical relationships can increase profits through
a. preventing firms from evading regulation b. creating a double-markup problem c. making the incentives of manufacturers and retailers unaligned d. facilitating price discrimination
If the demand for cucumbers falls when the price of tomatoes rises, then we know that tomatoes and cucumbers are:
A. substitutes. B. normal goods. C. complements. D. inferior goods.