The long run aggregate supply curve (LRAS) also represents
A) the full-employment level of output. B) the full-information level of output.
C) the full-adjustment level of output. D) all of the above.
D
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The distinguishing feature of a well-functioning financial market is the
A) continual increase in the liquidity of most assets. B) continual reduction in the riskiness of most assets. C) increased ease of converting common stocks into bonds. D) incorporation of available information into asset prices.
Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T = – 30 + 0.25Y
An increase in the intercept of the tax function of 10 units (from – 30 to – 20) would cause equilibrium income in the simple Keynesian model to fall by a. -20 units. b. 10 units. c. 20 units. d. 40 units.
Unpredictable inflation can cause businesses to:
A. have a hard time planning future production. B. cease production until they know how to adjust for inflation. C. restrict output and stockpile inventory. D. increase production due to expecting future price level changes.
The minimum point of the average total cost curve occurs at an output level that corresponds to
a. the maximum possible total cost b. an average total cost equal to the marginal cost of the next unit c. an average variable cost that is greater than the marginal cost of the next unit d. a marginal cost that is decreasing e. a constant average fixed cost