Suppose that IS and LM intersect at full-employment output. A rightward shift of IS will be followed by a __________ price level that shifts LM to the __________ in a return to full-employment
A) rising; right
B) rising; left
C) falling; right
D) falling; left
B
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The difference between the amount consumers would be willing to pay and the amount they actually pay for a good is called
a. price elasticity of demand. b. consumer surplus. c. the substitution effect. d. income elasticity of demand.
Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as:
A. the marginal cost of advertising is positive. B. the marginal cost of advertising exceeds the marginal benefit of advertising. C. the marginal benefit of advertising is positive. D. the marginal benefit of advertising exceeds the marginal cost of advertising.
What 3 macroaggregates that economists use to assess the health of an economy?
What will be an ideal response?