From an economic point of view, someone who goes shopping for groceries every week has a great deal of practice with how to purchase the combination of goods that will provide the most utility, even if the shopper doesn't phrase decisions in terms of a budget constraint
a. True
b. False
Indicate whether the statement is true or false
True
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In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts to the left, and the Fed wants to keep output unchanged
A) taxes will increase. B) the money supply will decline. C) the real interest rate will decrease. D) taxes will decrease.
Rent seeking lowers profits by
a. shifting the market demand curve to the right b. shifting the market supply curve to the left c. shifting the ATC curve upward d. shifting the ATC curve downward e. flattening the marginal revenue curve
Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?
a. the amount she paid to buy the new parts b. the amount she paid to buy new parts and gasoline c. the amount she paid to buy new parts, gasoline, and oil. d. the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.
Refer to the accompanying figure.
An economy in short-run equilibrium at point A has a(n) ________ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ________ or the central bank could intervene with monetary easing establishing the long-run equilibrium at point ________.
A. recessionary; C; B B. expansionary; C; B C. expansionary; B; C D. recessionary; B; C