Suppose Congress passes an investment tax credit that increases the quantity of investment goods that firms demand at any given interest rate. Which of the following would you expect to occur as a result of this change?
a. In the short run, unemployment will increase and inflation will fall.
b. In the short run, unemployment will increase and inflation will rise.
c. In the short run, unemployment will decrease and inflation will rise.
d. In the short run, unemployment will decrease and inflation will fall.
c
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A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to force some of its competitors out of the market
Indicate whether the statement is true or false
If a nonrenewable resource is used more in the current period, the return on saving the resource for future falls
a. True b. False Indicate whether the statement is true or false
If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then
a. GDP comparisons between the countries would overstate the economic welfare of country A compared to B. b. GDP comparisons between the countries would understate the economic welfare of country A compared to B. c. it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries. d. it would not introduce any bias in using GDP to compare economic welfare between the countries.
According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be
A) a shortage of 30 million gallons.
B) a surplus of 30 million gallons.
C) a shortage of 20 million gallons.
D) a surplus of 50 million gallons.