Suppose real GDP exceeds potential GDP. If the government decreases its expenditures on goods and services, then real GDP __________ and the price level __________.
a) decreases; rises
b) increases; falls
c) decreases; falls
d) increases; rises
c) decreases; falls
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In the BOP, travel and tourism are included in
A) unilateral transfers. B) the capital account. C) the merchandise account. D) the services account.
The assumption that people act in their best self-interest means people
a. do what gives them the greatest benefits at the lowest costs. b. are selfish. c. do what gives them the smallest benefits at the greatest costs. d. are irrational.
Many people believe that monopolies charge any price they want to without affecting sales. Instead, the output level for a profit-maximizing monopoly is determined by:
A. Marginal revenue = Demand. B. Average total cost = Demand. C. Marginal cost = Demand. D. Marginal cost = Marginal revenue.
If a firm operates at a loss, the loss is equal to TC - TR. If the firm shuts down instead, its loss is equal to FC. Given this, show that price must exceed AVC for the firm to operate at a loss and not shut down
What will be an ideal response?