A decrease in government spending will cause a(n) ________.
A. decrease in aggregate demand
B. increase in aggregate demand
C. decrease in the quantity of real output demanded
D. increase in the quantity of real output demanded
Answer: A
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GDP may inaccurately measure the value of aggregate output because it may not properly account for
A) production in the underground economy and the true value of government production. B) the true value of government production and the proper value of purchases and sales of used goods. C) the proper value of purchases and sales of used goods and depreciation of consumer durables. D) the depreciation of consumer durables and production in the underground economy.
The demand for a monopoly's output is p = 100 - Q. The firm's production function is Q = 2L. Which of the following is the firm's demand for labor?
A) w = 200 - 8L B) w = 200 - 4L C) w = 100 - L D) w = 2L
What price will a perfectly competitive firm typically charge in the long run?
a. A price that equals the minimum of its average cost of production b. A price that is lower than its average cost of production c. A price that ensures an accounting profit and an economic profit d. A price that is lower than the price charged by competitors
Which of the following is not correct?
a. Frictional unemployment results from the process of matching workers and jobs. b. Structural unemployment results when the number of jobs is insufficient for the number of workers. c. Minimum wages are the predominant reason for unemployment in the U.S. economy. d. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, it raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level.