If a household's income rises by 30%, its budget constraint will
A. shift in parallel to the old one.
B. pivot at the Y-intercept.
C. shift out parallel to the old one.
D. be unaffected.
Answer: C
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In a certain economy, the components of aggregate spending are given by:C = 100 + 0.9(Y - T) - 500rI = 150 - 1,000rG = 200NX = 50T = 100Given the information about the economy above, what is the short-run equilibrium output if the real interest rate is 6 percent?
A. 320 B. 3,200 C. 3,500 D. 450
Define microeconomics
What will be an ideal response?
People behave rationally when they
A) follow the advice of government leaders. B) never have regrets about their decisions. C) make decisions they think will make themselves better off. D) make decisions solely based on financial outcomes.
Since countries differ in the amount of economic activity that is transacted in organized markets,
A. some countries are more productive than others. B. persons live better in some countries than others. C. international comparisons of per capita GDP are often misleading. D. comparisons between countries are totally impossible.