An increase in the price level will
a. increase the equilibrium level of national income
b. decrease the equilibrium level of national income
c. increase aggregate expenditures
d. increase aggregate demand
e. have no effect on aggregate expenditure
B
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Which of the following statements regarding a firm's long-run average total cost (LRATC) curve and its short-run average total cost (SRATC) curve is true?
A) The LRATC shows the lowest cost at which a firm is able to produce a given level of output when no inputs are fixed. B) The contribution of average fixed cost to LRATC is greater than its contribution to SRATC. C) The shape of the LRATC is affected by the law of diminishing returns. D) The SRATC, but not the LRATC, can be used by a firm's managers for planning.
Which of the following items are NOT counted in U.S. GDP?
A) your purchase of a new Ford Mustang B) your purchase of new tires for your old car C) GM's purchase of tires for new cars D) a foreign consumer's purchase of a new Ford Mustang
Empirical evidence shows that the quantity theory of money is a good theory of inflation
A) in the long run, but not in the short run. B) in the short run, but not in the longrun. C) in both the long run and the short run. D) not in either the long run nor the short run.
Which of the following is consistent with Keynes's view of Say's law?
A) Saving increases by $3 billion, consumption falls by $3 billion, and investment rises by $3 billion. B) Consumption rises by $3 billion and saving rises by more than $3 billion. C) Saving rises by $3 billion, consumption falls by $3 billion, and investment rises by something less than $3 billion. D) Saving rises by $3 billion, consumption falls by $3 billion, and investment rises by $6 billion. E) none of the above