Investment, as defined in national income accounts, would include:
A. government construction of new highways and dams.
B. personal consumption expenditures on durable goods.
C. purchases of shares of stock in corporate businesses.
D. additions to business inventories.
Answer: D
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Using the Keynesian model, the effect of an increase in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the short run
A) a decrease; a decrease B) a decrease; no change C) an increase; an increase D) no change; a decrease
Which of the following best completes the sentence; "Under a gold standard a central bank … "?
A. will have gold reserves depleted when exports exceed imports. B. wants to keep their gold reserves fixed. C. can have too little gold but never have too much. D. can have too much gold.
The management of Local Cinema has estimated the monthly demand for tickets to be ln Q = 22,328 ? 0.41 ln P + 0.5 ln M ? 0.33 ln A + 100 ln PDVD, where Q = quantity of tickets demanded, P = price per ticket, M = income, A = advertising outlay, and PDVD = price of a DVD rental. It is known that P = $5.50, M = $9,000, A = $900, and Pvcr = $3.00. Based on the information given, which of the following statements is false?
A. Movies are normal goods. B. The advertising elasticity of demand for movie tickets is ?0.33. C. Advertising decreases the demand for movie tickets. D. Movies are complements for DVD rentals.
What is the law of supply and how do we illustrate it?
What will be an ideal response?