An increase in demand will increase total revenue:
a. Always
b. Only if supply is relatively inelastic.
c. Only if supply is relatively elastic.
d. Only if supply is unit elastic.
a
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
In the basic closed-economy ISLM model, the goods market equilibrium condition is
A) output = consumption + investment + government spending. B) output = consumption + investment + government spending - tax. C) output = consumption + investment + government spending + net export. D) output = potential output.
Which of the following is true about income inequality?
A. Inequality tends to diminish as the population increases. B. Inequality tends to be greatest in the poorest countries. C. Inequality tends to get worse as a country develops. D. Inequality is not an issue for developed countries.
An intertemporal budget constraint
A) requires the present value of consumption to be equal to the present value of production. B) requires total spending in each period to be equal to total consumption in each period. C) does not take into account the ability to borrow or loan goods domestically. D) categorizes income into permanent and temporary income. E) limits consumption to the amount produced in each time period.