Using Figure 11.1, which fiscal policy action would increase aggregate demand from AD1 to AD3?
A. A decrease in government spending.
B. A decrease in government spending matched by an equal decrease in taxes.
C. A decrease in transfer payments.
D. A decrease in taxes.
Answer: D
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In a long-run equilibrium in a perfectly competitive market, firms are selling at a price equal to average cost.
Answer the following statement true (T) or false (F)
When a good is not excludable but is rival in consumption the:
A. free rider problem may arise. B. tragedy of the commons may arise. C. good is likely a private good. D. good is likely a common resource.
According to the text discussion of efficient capital markets, which of the following would a well-trained economist recognize as logical and expected?
A. Experienced investors pay handsome sums to get investment advice from expert advisors B. Monkeys throwing darts at a financial page can hit stocks that perform as well as stocks picked by financial experts C. The best managed companies usually earn higher returns than companies rated lower on the list of well managed companies D. Only expert investors should invest in the stock market
The specific technology chosen by a profit-maximizing clothing manufacturer depends on
A. output prices. B. supply of the output. C. input prices. D. demand for the output.