The macroeconomic policy planner’s job is made difficult because of
A. inaccurate multiplier estimates.
B. timing problems.
C. disagreements over potential GDP.
D. uncertain forecasts.
E. All of the above are correct.
Answer: E
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The United States economy is generally operating _________ the production possibilities curve.
A. inside B. outside C. on
Refer to Table below. Given the consumption schedule in the table above, the marginal propensity to save is
Consumption (dollars) $1,200 2,100 3,000 Disposable Income (dollars) $3,000 4,000 5,000 a. 0.1. b. 0.4. c. 0.7. d. 0.9.
For a monopolistically competitive firm, price equals average revenue
Indicate whether the statement is true or false
Borem is a big fan of wine from Trader Moe's. Moe's sells a high-quality expensive wine and a cheap low-quality wine. Borem buys both types but tends to buy more bottles of the cheaper wine
Borem later moves to a new city where he must drive a long distance to get his wine at Trader Moe's. Assuming the income effect is small, and that Borem still buys his wine from Moe's, how is he going to change his relative consumption of the expensive and cheap wines?