Use the data in the following table for a private closed economy to answer the next question. All figures are in billions of dollars.Domestic Output or Income (RGDP = DI)Consumption$540$540560555580570600585620600640615660630The MPC and multiplier are, respectively,
A. 0.75 and 1.33.
B. 0.80 and 1.25.
C. 0.80 and 5.
D. 0.75 and 4.
Answer: D
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What is the difference between the short run and the long run when there is full employment and the government engages in deficit spending?
A) Real GDP will increase in the short run but not the long run. B) Real GDP will not increase in either the long run or the short run. C) Real GDP will increase in the long run but not the short run. D) Real GDP will increase in both the short run and the long run.
Sandra has been working as a software engineer for five years and Jack has been working as a software engineer for two years. Which of the following statements is true of Sandra and Jack?
A) Sandra is likely to earn lower wages than Jack. B) Sandra is likely to earn the same wage as Jack. C) Sandra is likely to be more productive at work than Jack. D) Sandra is likely to be equally productivity at work as Jack.
Assuming that a society always operates on its production possibilities curve, an inward shift of the curve implies that
A. the country's capacity to produce is fixed. B. the country is not using its resources efficiently. C. the country's capacity to produce has contracted. D. All of the choices are true.
A profit-maximizing firm will only produce a positive amount of output if:
A. its total revenue is greater than or equal to its variable cost. B. its total revenue equals its total cost. C. its total revenue is greater than its fixed cost. D. its total revenue is greater than its total cost.