When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the
A) output effect. B) substitution effect. C) income effect. D) price effect.
A
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An increase in government expenditures by $100 (unmatched by an increase in taxes) would, if the MPC = 0.9, result in an increase in national income by
a. $1,000 b. $9,000 c. $900 d. $190 e. inadequate information is given
Over the last 40 years, the gap between the rich and the poor in the United States has been increasing. Economists have justified this outcome by noting that
A. efficiency can never be achieved without greater inequality. B. inequality is not a problem. C. inequality is a desirable policy outcome. D. inequality is a necessary consequence of achieving greater efficiency. E. efficiency should be achieved regardless of the cost.
Suppose the price index was 110 in 2004, 120 in 2005, and 125 in 2006 . Which of the following statements is correct?
a. The economy experienced inflation between 2004 and 2005 and between 2005 and 2006. b. The inflation rate was positive between 2004 and 2005, and it was negative between 2005 and 2006. c. The inflation rate was higher between 2005 and 2006 than it was between 2004 and 2005. d. All of the above are correct.
Payment in the capital market is called investment.
Answer the following statement true (T) or false (F)