If the marginal propensity to consume is .80 and both taxes and government purchases increase by $50 billion, GDP will:
A. Increase by $50 billion
B. Decrease by $50 billion
C. Increase by $10 billion
D. Decrease by $10 billion
A. Increase by $50 billion
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The profit-maximizing price and quantity established by the unregulated monopolist in the above figure are
A) Q1 units of output and a price of P5. B) Q3 units of output and a price of P3. C) Q1 units of output and a price of P1. D) Q4 units of output and a price of P4.
The observed unemployment rate is less than the natural rate of unemployment if:
a. the inflation rate is lower than expected. b. the reservation wage is adjusted to account for higher inflation. c. real wage increases with increase in prices. d. reservation wages go up with the rate of inflation. e. the inflation rate is higher than expected.
According to the text, what share of the world's countries now use floating exchange rate systems?
A) 100% B) 70% C) 30% D) 15%
Interest rates are positive because
A. people prefer future consumption over current consumption. B. usury laws require rates to be very high. C. banks are not competitive. D. people prefer current consumption over future consumption.