International capital flows in an open economy have the effect of
a. increasing the power of fiscal policy.
b. reducing the power of fiscal policy.
c. reducing the power of fiscal policy in an expansion, and increasing it in a contraction.
d. increasing the power of fiscal policy in an expansion, and reducing it in a contraction.
b
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Suppose the market demand for milk is Qd = 150 - 5P. Additionally, suppose that a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. What is the market equilibrium quantity?
A. 5 gallons per day B. 35 gallons per day C. 50 gallons per day D. 100 gallons per day
In the Keynesian model, investment, government spending, and net exports are treated as autonomous expenditures, which means they are independent of:
a. expectations. b. the price level. c. political processes. d. real GDP.
Which of the following is the oldest economic system?
a. command economy b. traditional economy c. market economy d. underground economy
Suppose the economy is in long-run equilibrium. If there is an increase in the supply of labor as well as an increase in the money supply, then we would expect that in the short-run,
a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.