If the MPS is one-third, a $100 increase in net exports will
A) reduce real Gross Domestic Product (GDP) by $300.
B) reduce real Gross Domestic Product (GDP) by $100.
C) increase real Gross Domestic Product (GDP) by $300.
D) increase real Gross Domestic Product (GDP) by $33.
C
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Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce
A) -0.66 B) 0.5 C) 1.5 D) 2
Isoquants are convex to the origin due to:
A) the law of diminishing marginal utility. B) the assumption of the diminishing marginal productivity of each input. C) the fact that as less capital is used, its marginal productivity falls. D) the fact that as more labor is used, its marginal productivity rises.
Between 2003 and 2008, the actual federal funds rate
A) tended to be lower than the rates predicted by the Taylor rule. B) tended to higher than the rates predicted by the Taylor rule. C) followed closely the rates predicted by the Taylor rule. D) moved in directions opposite to the rates predicted by the Taylor rule.
A firm sets its price at $10.00 per unit. It has an average variable cost of $8.00 and an average fixed cost of $4.00 per unit. In the short run, this firm is a. incurring a loss of $2.00 per unit and should shut down
b. unable to cover all of its fixed cost and hence should shut down. c. incurring a profit. d. incurring a loss per unit of $2.00, but since it can still cover its variable costs, should continue to operate