If government purchases increase by $10 billion and the economy's MPC is .8, the aggregate demand curve will shift ________.
A. leftward by $40 billion at each price level
B. leftward by $50 billion at each price level
C. rightward by $50 billion at each price level
D. rightward by $10 billion at each price level
Answer: C
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Frank Murphy is considering how many snowmobiles to purchase for his snowmobile rental business. Below are his estimates of the number of snowmobile rentals per year, depending on the number of snowmobiles available.Number ofSnowmobilesYearlyrentals1902170324043005350After paying all non-interest expenses, expenses Frank expects to net $10 per rental. Each snowmobile costs $15,000. How many snowmobiles should Frank purchase if the real interest rate is 4.5%?
A. 4. B. 0. C. 2. D. 1.
John Maynard Keynes disagreed with the classical economists because he believed that
A) wages and prices adjust slowly. B) international trade plays a major role in the macroeconomy. C) government intervention in the economy cannot reduce business cycles. D) unemployment will be eliminated quickly by the invisible hand of the market.
Keynes believed that the instability in income was caused by variability in
a. investment. b. taxes. c. consumption and savings. d. government spending.
A dominant-firm's residual demand curve is
A) the horizontal difference between the market demand curve and the supply curve of the fringe firms. B) the vertical difference between the market demand curve and the supply curve of the fringe firms. C) the demand curve left for the fringe firms after the dominant firm has determined an output level. D) None of the above.