The "fiscal multiplier" is the ripple effect of subsequent:
A. increases in spending following an initial increase in government spending.
B. increase rate changes following a change to the federal funds rate.
C. increases in lending following an initial increase in bank reserves.
D. private-sector layoffs following an initial layoff in the public sector.
Answer: A. increases in spending following an initial increase in government spending.
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Despite its status as one of the richest countries in the world, Japan
a. has a very low level of productivity. b. has few natural resources. c. has very little human capital. d. engages in a relatively small amount of international trade.
Use the following list of modern macroeconomic theories in order to describe the following statement: Lower tax rates and less government intervention in the private economy is the only way to stimulate saving, investment, and productivity.
A. Monetarism B. The theory of rational expectations C. New classical economics D. Supply-side economics
Figure 8.3 shows a firm's marginal cost, average total cost, and average variable cost curves. At Q = 50, the average fixed cost is:
A. $30. B. $40. C. $50. D. $60.
Figure 8-2
Figure 8-2 shows a manufacturer’s total profit curve. To maximize total profit, the manufacturer should produce ____ units of output.
A. 10 B. 12 C. 16 D. 18