Changes in government purchases affect planned spending:
A. directly, by changing autonomous expenditures.
B. autonomously.
C. indirectly, by changing induced expenditures.
D. only when there is an expansionary gap.
Answer: A
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Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. What is the general equilibrium quantity of milk?
A. 6.22 million gallons B. 1.48 million gallons C. Zero gallons D. 50.56 million gallons
When the world price of the traded good is lower than the domestic no-trade equilibrium price, free trade causes domestic production to fall and domestic consumption to rise
a. True b. False Indicate whether the statement is true or false
Economic choice and competitive behavior are the result of
a. basic human greed. b. poverty. c. private ownership of resources. d. scarcity.
A movement along the consumption function can be caused by a
A. decrease in taxes. B. well performing stock market. C. newly found $100,000 inheritance. D. check from sold mutual funds.