Suppose the following information describes the economy:GDP2,000Consumption1,500Government Spending300Net taxes400Public saving equals ________ and national saving equals ________.
A. 200; 100
B. 200; 300
C. 100; 200
D. 100; 100
Answer: C
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Suppose that when a perfectly competitive firm produces 1,000 units of output, its total variable cost is $1,900. If the marginal cost of producing the 1,000th unit is $1.70, and if the market price of each unit of output is $1.70, then the firm should:
A. shut down. B. increase output. C. raise its price. D. continue to produce 1000 units.
Which of the following accurately describes an effect of hurricane Katrina on GDP?
A) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. B) GDP would increase well-being. C) GDP would increase reflecting the costs of cleanup. D) GDP would decrease reflecting the costs of cleanup.
The aggregate real money demand schedule L(R,Y)
A) slopes upward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy. B) slopes downward because a fall in the interest rate reduces the desired real money holdings of each household and firm in the economy. C) has a zero slope because a fall in the interest rate keeps constant the desired real money holdings of each household and firm in the economy. D) slopes downward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy. E) slopes downward because a rise in the interest rate makes consumers less focused on the liquidity of their assets.
The Federal Trade Commission regulates which of the following?
A. trade with foreign nations B. unfair trade practices by businesses C. financial markets D. the banking industry