In considering the net effect of expansionary fiscal policy on the trade deficit, the:
A. income and price effects work in the same direction, so the trade deficit is decreased.
B. price effect offsets the income effect.
C. income and price effects work in the same direction, so the trade deficit is increased.
D. income effect offsets the price effect.
Answer: C
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An economy in which output has decreased and prices have increased would suggest that there has been a:
A. positive supply side shock. B. negative supply side shock. C. positive demand side shock. D. negative demand side shock.
Stock market fluctuations
a. often go hand in hand with fluctuations in the economy more broadly. b. rarely have anything to do with fluctuations in the economy more broadly. c. have few, if any, macroeconomic implications. d. are attributable to the widespread belief that the efficient markets hypothesis is correct.
A manager of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week.
Given the above, the 14th worker hired adds ________ to the firm's total revenue each week.
A. $200 per week B. $400 per week C. $500 per week D. $700 per week E. $900 per week
National income minus personal taxes net of transfer payments equals disposable income.
Answer the following statement true (T) or false (F)