The classical model predicts that, in the short-run, a tax cut financed by an increase in the money supply would
a. leave output and the price level unchanged.
b. increase the price level but leave output unchanged.
c. increase output but and reduce the price level.
d. increase output and the price level by increasing aggregate demand.
e. None of the above.
B
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In the figure above, the poorest 20 percent of households receive ________ of total income
A) 20 percent B) 10 percent C) 5 percent D) 15 percent
Production costs are likely to rise after an average-cost pricing policy is mandated because the monopolist will:
A. increase output. B. decrease output. C. engage in new and inventive production methods. D. have no incentive to control costs.
The owner of Tie-Dyed T-shirts, a perfectly competitive firm, has hired you to give him some economic advice. He has told you that the market price for his shirts is $20 and that he is currently producing 200 shirts at an AVC of $15 and an ATC of $25. What would you recommend to him?
A. To shut down in the short run, as he is incurring a loss, and to leave the industry in the long run, if there are no changes in economic conditions. B. To continue producing in the short run, as his loss from production is less than his fixed costs, but to exit the industry in the long run if there are no changes in economic conditions. C. To continue to produce in the short run, even though he is earning a loss, and to expand in the future with the hope of increasing market share and total revenue. D. You tell him you cannot make any recommendations until you know what his fixed costs are.
Average labor productivity times the proportion of the population employed equals:
A. real GDP per worker. B. real GDP. C. real GDP per person. D. output per worker.