If we observe an increase in real GDP and an increase in the price level after an increase in aggregate demand, we can conclude that
A. the aggregate supply curve is vertical.
B. the aggregate supply curve is upward sloping.
C. the aggregate supply curve is horizontal.
D. the economy is now at full employment.
Answer: B
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The capture theory of regulation predicts that regulations bring ________ to producers and impose ________ on any individual consumer
A) small benefits; small costs B) small benefits; large costs C) large benefits; small costs D) large benefits; large costs E) large benefits; no costs
In 2008, net exports in the U.S. were
a. $1,831 billion. b. -$2,539 billion. c. -$900 billion. d. -$1,500 billion. e. -$708 billion.
The consumption function will shift for all of the following reasons except:
A. a change in a household's real assets. B. a change in interest rates. C. expectations of price changes. D. changes in a household's disposable incomes.
Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ. This implies that:
A. labor is not readily substitutable for capital. B. the law of diminishing returns is not applicable. C. the firms are producing an inferior good. D. the demand for capital is highly price elastic.