One of the possible consequences of the expenditure schedule lying below the level of full employment GDP is
A. unemployment.
B. rising prices.
C. increasing production.
D. decreasing inventories.
Answer: A
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Isaac is 25, Sonia is 45, and Jenny is 75 . Would you suppose that each would have the same marginal propensity to consume? Whose ideas on consumption relate to age?
The rational expectations theory indicates that expansionary policy will:
A. stimulate real output in the long run but not in the short run. B. expand real output and employment if the public quickly anticipates the effects of the expansionary policy. C. equalize real and nominal interest rates during lengthy periods of inflation. D. fail to increase employment because individuals will anticipate it and take actions that will offset its impact.
As the interest rate increases, the opportunity cost of waiting to receive a future amount:
A. increases. B. remains the same. C. decreases. D. may rise or fall.
Economists typically agree that the special protection given to owners of patents tends to
A. increase expenditures on research and development. B. reduce economic growth. C. reduce expenditures on research and development. D. reduce productivity.