If you are living in a period of continued high inflation on a fixed income, the cost of the goods and services you buy ____ and your nominal income ____
a. decreases, decreases
b. increases, increases
c. decreases, remains the same
d. increases, remains the same
d
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A welfare loss occurs when a monopolist chooses not to produce units of output that are of greater marginal value to consumers than the marginal cost of producing them
a. True b. False Indicate whether the statement is true or false
If a cut in prices decreases total revenue in the short run, what will it do to total revenue in the long run? a. It will decrease total revenue in the long run
b. It will increase total revenue in the long run. c. It will leave total revenue unchanged in the long run. d. Any of the above results are possible in the long run.
If a country wants to make extensive use of monetary policy to address domestic issues, then that country should adopt a floating exchange-rate.
Answer the following statement true (T) or false (F)
Assuming that MPC is .75, equal increases in government spending and tax collections by $10 billion will:
A. Leave the equilibrium GDP unchanged B. Increase the equilibrium GDP by $10 billion C. Increase the equilibrium GDP by $2.5 billion D. Reduce the equilibrium GDP by $10 billion