Imagine an economy that does not have international trade and is initially in equilibrium. Later the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 65 cents of every dollar is spent, and the rest is saved. The new equilibrium level of GDP for the economy will be higher by approximately:
a. $1 billion.
b. $350 million.
c. $65 million.
d. $227.5 million.
e. $227.5 million.
a
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The term capital in economic theory refers to
A) any privately owned resource. B) bonds, stocks, and similar financial assets. C) money available for lending or spending. D) produced goods used to produce future goods. E) savings out of income.
Refer to the table above. What is the opportunity cost of commute per month to work if Ryan rents Apartment 2?
A) $20 B) $150 C) $200 D) $300
Which of the following prevents potential competitors from entering a monopolist's market?
a. legal restrictions b. diseconomies of scale c. product differentiation d. stable market demand e. rising marginal cost
If the output level is such that the aggregate expenditure line lies below the 45-degree line, which of the following is true?
a. Aggregate expenditure is greater than output, so inventories will increase and output will be raised. b. Aggregate expenditure is greater than output, so inventories will decrease and output will be increased. c. Aggregate expenditure is less than output, so inventories will decrease and output will be raised. d. Aggregate expenditure is less than output, so inventories will increase and output will be lowered. e. Aggregate expenditure is greater than output, so inventories will increase and output will be lowered.