The multiplier principle explains how
A. any change in the economy has a one-time impact.
B. $1 invested will increase GDP by more than $1.
C. expenditures and incomes decrease as investment increases.
D. $1 invested will decrease GDP by less than $1.
Answer: B
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Explain the reasons firms might follow the Baumol model of maximizing revenue subject to achieving a minimum level of profits
What will be an ideal response?
Determining the price of compact discs is a concern of:
a. macroeconomics. b. microeconomics. c. both macroeconomics and microeconomics. d. neither macroeconomics nor microeconomics.
As a result of the housing-market crash:
A. both aggregate demand and aggregate supply shifted to the left. B. both aggregate demand and aggregate supply shifted to the right. C. aggregate demand shifted to the left, and aggregate supply shifted to the right. D. aggregate demand shifted to the right, and aggregate supply shifted to the left.
In some rural regions of the United States, residents harvest much of their food supplies directly from nature by hunting, fishing, and gathering. With regard to these subsistence activities: a. GDP will overestimate the true value of the nation's production of final goods and services
b. GDP will underestimate the true value of the nation's production of final goods and services only when the income approach is used. c. GDP will correctly estimate the true value of the nation's production of final goods and services. d. GDP will underestimate the true value of the nation's production of final goods and services.