In Figure 11.1, an increase in the marginal propensity to save is represented by a change in the consumption function from
A) C1 to C3. B) C3 to C1. C) C2 to C1. D) C1 to C2.
C
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Which of the following is true of protectionism?
A) It lowers prices for domestic consumers and increases social surplus. B) It increases prices for domestic consumers and also increases social surplus. C) It increases prices for domestic consumers and lowers social surplus. D) It lowers prices for domestic consumers and also reduces social surplus.
Rent-seeking behavior results in
a. increased economic activity by promoting efficiency. b. lower economic activity by diverting resource to less-productive uses. c. a more equitable distribution of income and wealth. d. lower prices throughout the economy. e. greater income and wealth in the private sector.
Which of the following is not an example of an institution (rules of the game)?
a. formal rules of behavior b. government takeover of private corporations c. a constitution d. informal constraints on behavior e. traditions
Potential GDP is an estimate of the economy's ability to produce goods and services if the
a. labor force is fully employed. b. price level is stable. c. trade balance is zero. d. federal budget is balanced.