The tendency for investment to increase when aggregate output increases is the result of the ________ effect.
A. income
B. accelerator
C. substitution
D. multiplier
Answer: B
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It is generally claimed that a movement from autarky to free trade consistent with Ricardian comparative advantage increases the economic welfare of each of the trade partners
However, it may be demonstrated that under certain circumstances, not everyone in each country is made better off. Illustrate such a case.
Which of the following explains why theater prices for popcorn are three or four times higher than the popcorn price in the grocery store?
A. Grocery stores are satisfied with normal profit while theaters seek economic profit. B. The grocery store sells a much higher volume and gets its profits that way. C. The cost of popping the popcorn is high. D. The demand curve for popcorn in a theater is more inelastic than the demand for popcorn at the grocery store.
Figure 5-9
In Figure 5-9, the consumer's marginal rate of substitution at his optimum choice of X and Y is
a.
?1.
b.
16.
c.
8.
d.
?8.
Based on the graph showing the effects of a government budget surplus, how would a budget surplus affect the equilibrium quantity of loanable funds exchanged?
a. It would create a higher equilibrium quantity of loanable funds exchanged.
b. It would create a lower equilibrium quantity of loanable funds exchanged.
c. It would have no influence on the equilibrium quantity of loanable funds exchanged.
d. It would drive the equilibrium quantity of loanable funds exchanged to zero.