In the Keynesian model, a $1 billion increase in autonomous consumption leads to ________ in short-run equilibrium output.
A. a $1 billion decrease
B. a $1 billion increase
C. no change
D. a greater than $1 billion increase
Answer: D
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Mutual interdependence means that each firm in an oligopoly
A. depends on the other firms for its markets. B. considers the reactions of its rivals when it determines its pricing policy. C. faces a perfectly inelastic demand for its product. D. depends on the other firms for its inputs.
The term structure of interest rates describes the relationship between the rate of interest charged and the
a. length of time until repayment of the loan b. amount of the loan c. riskiness of the borrower d. identity of the borrower e. age of the lender
Productivity growth is the main cause of rising living standards
a. True b. False Indicate whether the statement is true or false
If the government wishes to decrease GDP by $2,000b, and the MPC is 0.6, it should:
A. increase its spending by $800b. B. decrease its spending by $800b. C. decrease its spending by $1,200b. D. increase its spending by $1,200b.