If the government wishes to increase GDP by $1,000b, and the MPC is 0.6, it should increase its spending by:
A. $250b.
B. $400b.
C. $600b.
D. $1,000b.
B. $400b.
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People with savings often deposit their funds in a commercial bank, rather than investing them directly with business enterprises, in order to
A) avoid the problems associated with asymmetric information. B) earn the highest possible return for taking on the riskiest investments. C) avoid the problems associated with financial intermediation. D) All of the above are correct.
When oligopolies seek to operate as a single-price monopoly, the firms produce at the point where:
A) P = MC. B) MR = MC. C) P < ATC. D) P = MR. E) MC = ATC.
Scarcity can be eliminated through
A) the use of market mechanisms. B) exploration that helps us find new resources. C) wise use of our resources. D) None of the above because scarcity cannot be eliminated.
What is one reason perfectly competitive firms wish to be ever more efficient?
A) Individual firms are awarded by the tax code to be more efficient. B) Individual firms can better control their costs than the price they can charge. C) Individual firms can better control their costs than their output levels. D) Individual firms don't need to be efficient; government policies do not reward efficiency.