Data on output and aggregate expenditure in Macroland are given below.Output(Y)Aggregate Expenditure2,0002,3003,0003,2004,0004,1005,0005,0006,0005,900Based on these data, the short-run equilibrium level of output is:
A. 3,200.
B. 2,000.
C. 5,000.
D. 4,100.
Answer: C
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Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $2,000 and a unit of advertising on the radio costs $5,000. At their current advertising levels, the
marginal benefit of advertising in the flyer is $2,500 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) To maximize profits, Franco's should increase the amount of advertising in flyers. B) To maximize profits, Franco's should decrease the amount of radio advertising. C) To maximize profits, Franco's should decrease the amount of advertising in flyers. D) Franco's is currently maximizing its profits from advertising.
For price discrimination to exist, all of the following are necessary EXCEPT
A) a downward sloping demand curve. B) an identifiable group of buyers with different elasticities of demand. C) an upward sloping marginal cost curve. D) there can be no resale of the product.
The amount of time it takes for fiscal policy to have an impact on the economy creates:
A. an information lag. B. a formulation lag. C. an implementation lag. D. a direction lag.
The two best known bond rating services are:
A. Standard & Poor's and the Wall Street Journal. B. the Federal Reserve and the U.S. Treasury. C. the Federal Reserve and Moody's Investment Services. D. Standard & Poor's and Moody's Investment Services.