An increase in the marginal propensity to save from .3 to .4 will cause
A) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a smaller effect on output.
B) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a larger effect on output.
C) the ZZ line to become flatter and a given change in autonomous consumption (c0 )) to have a smaller effect on output.
D) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a larger effect on output.
B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
F-statistics computed using maximum likelihood estimators
A) cannot be used to test joint hypothesis B) are not meaningful since the entire regression R2 concept is hard to apply in this situation C) do not follow the standard F distribution D) can be used to test joint hypothesis
Since 1960, real GDP has fluctuated to some extent; however, there has been virtually no overall growth when the entire time span is considered
a. True b. False
In Gelate, Pennsylvania, the market for compact discs has evolved as follows. There are two firms that each use a marquee to post the price they charge for compact discs. Each firm buys CDs from the same supplier at a cost of $5.00 per disc. The inverse market demand in their area is given by P=10-2Q=, where Q is the total output produced by the two firms.
a) Solve for the Bertrand equilibrium price and market output. b) Would your answer differ if the products were not perfect substitutes? Explain.