If aggregate demand increases by the amount of the recessionary GDP gap and aggregate supply is upward-sloping,
A. The economy will move to full employment.
B. An AD surplus will occur.
C. An inflationary GDP gap will develop.
D. A recessionary GDP gap will still exist.
Answer: D
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A condition necessary for a country to achieve economic growth is
A) high tax rates so the government can purchase a lot of capital equipment. B) strict environmental regulations. C) economic freedom. D) government control of the banking system. E) democracy.
The distinction between sunk and incremental costs is most helpful in answering which question?
A) How many more people should be added to the production process? B) What is the correct price to charge? C) Should we begin to build a new factory? D) Should we continue developing a new software application that we began last year?
The profit-maximizing rule of production is to produce the level of output where price is equal to marginal cost. Since the marginal cost (MC) curve is U-shaped, the price line running horizontal to the X-axis intersects the MC curve at two points. How is the profit maximization rule applied in this case?
When the U.S. Congress increased the immigration quota for software engineers and other high-tech workers in 2000, the intent was to change the shape and position of the
A. Investment function. B. AD curve. C. Consumption function. D. AS curve.