An increase in productivity will:
a. Increase aggregate demand
b. Increase aggregate supply
c. Decrease aggregate supply and aggregate demand
d. Increase aggregate supply and aggregate demand
Ans: b. Increase aggregate supply
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Economists argue for free trade in export markets because
A) all consumers and producers benefit from exporting goods. B) the gains to the U.S. producers outweigh the losses to the U.S. consumers. C) the gains to the U.S. consumers outweigh the losses to the U.S. producers. D) no one is made worse off by exporting goods. E) exporting goods decreases total surplus.
Bob plans to spend $60 per month on DVD movie rentals and CDs. The price of a movie rental is $3 and the price of a CD is $15. If Bob rents 5 DVDs per month, how many CDs can he buy?
A) 1 B) 2 C) 3 D) 4
Refer to the above table. If planned investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $4, other things constant, then the equilibrium real GDP would become:
The table shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars.
A. $660
B. $630
C. $640
D. $650
Figure 7-13
Figure 7-13 shows the average total cost curves of four firms that produce milk. Some of the dairies are more productive. AR = P is the long-run price of milk. How many of these dairies will remain in the industry in the long run?
A. All of them B. Only 2 C. Only 3 D. Cannot determine with information given