In a closed economy, if Y and T remained the same, but G rose and C fell but by less than the rise in G, what would happen to public and national saving?
a. public and national saving would rise
b. public and national saving would fall
c. public saving would rise and national saving would fall
d. public saving would fall and national saving would rise
b
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If the government increases its purchases of goods and services by $3,000 and the MPC is 0.8, GDP and income will eventually increase by
A) $2,400. B) $6,000. C) $15,000. D) $24,000.
The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is TRUE of the Chinese experience?
A) The worldwide decline in demand led to a collapse of Chinese exports. B) Instead of relying solely on the economy's self-correcting mechanism, much more aggressive fiscal expansions than those of the U.S. (in addition to a substantial monetary easing) served to shift the AD curve back to general equilibrium relatively quickly. C) The Chinese economy was better able than the U.S. economy to weather the financial crisis with output growth starting to grow earlier and more quickly than that of the U.S. D) All of the above. E) None of the above.
The marginal revenue curve of a perfectly competitive firm
A) has a vertical intercept equal to exactly one-half of the vertical intercept for the demand curve. B) lies below the demand curve and above the average revenue curve. C) intersects the average revenue curve from above at the maximum point of the average revenue curve. D) is also the demand curve faced by the firm.
Which of the following is NOT true of opportunity cost?
a. Opportunity costs are subjective because they depend upon how the decision-maker values his or her options. b. Opportunity costs are only the monetary costs of lost options. c. Opportunity costs are the highest-valued alternative sacrificed in order to choose an option. d. Only the decision-maker can determine his or her opportunity costs for any particular action.