Refer to Figure 16-10. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) buy Treasury bills B) increase government spending
C) increase income taxes D) decrease the discount rate
C
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The profits of business firms, defined as the difference between total revenue and total cost, are not zero because
A) capitalists have a near monopoly over the means of production. B) information is a scarce good. C) the government defines some opportunity costs as revenue in order to increase tax receipts. D) there would be no investment if firms did not earn positive profits.
The quantity theory of money predicts that, in the long run, inflation results from the
A) money supply growing at a faster rate than real GDP. B) velocity of money growing at a faster rate than real GDP. C) velocity of money growing at a lower rate than real GDP. D) money supply growing at a lower rate than real GDP.
The contention that specific sensitive domestic technologies must not be traded freely is
A) a national defense concern. B) the infant industry argument. C) dumping. D) to protect domestic jobs.
Briefly summarize the factors that influence your personal level of consumption spending. Which factor would you say is the single most important determinant of your consumption spending? Why?
What will be an ideal response?