Currently, China and India are growing much faster than the United States and Western Europe. This high rate of growth will eventually and naturally slow down in the future because:
a. China and India will exhaust their natural resources.
b. Actually, there is no economic reason for China and India's growth rates to fall in the future.
c. Current account surpluses will eventually cause capital flight from these nations which will lower the value of their currency and reduce their growth rates.
d. Consumption will increase and crowd out investment spending.
e. Diminishing returns will eventually set in.
.E
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If a firm increases its capital stock, real wages will likely ________ and the equilibrium quantity of labor will likely ________
A) decrease; decrease B) increase; increase C) decrease; increase D) increase; decrease
If an increase in prices increases total revenue for a product in the short run, in the long run, it will: a. Increase total revenue by more
b. Increase total revenue by less. c. Decrease total revenue. d. Either b. or c. could result in the long run.
Assume the most typical shapes for the demand and supply in a competitive market. Suppose that demand falls and supply increases. Which of the following statements is correct?
a. The equilibrium price will fall; the equilibrium quantity may rise or fall. b. The equilibrium price will rise; the equilibrium quantity may rise or fall. c. The equilibrium quantity will fall; the equilibrium price may rise or fall. d. The equilibrium quantity will rise; the equilibrium price may rise or fall. e. The equilibrium price will fall; the equilibrium quantity will not change.
Consumption spending is $16 million, planned investment spending is $4 million, unplanned investment spending is $2 million, government purchases are $6 million, and net export spending is $1 million. What is aggregate expenditure?
What will be an ideal response?