Given the above graph, as you move from point A to point B,
A. output is unchanged.
B. cost is unchanged.
C. the rate at which the firm can substitute labor for capital while holding output constant decreases.
D. both a and b
E. both a and c
Answer: E
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The table above gives data for the nation of Pearl, a small island in the South Pacific. If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level, the new equilibrium real GDP is ________, and the nation is now experiencing a(n) ________.
A) $22 billion; inflationary gap B) $22 billion; recessionary gap C) $28 billion; inflationary gap D) $28 billion; recessionary gap E) $25 billion; equilibrium
One advantage of a proprietorship is that
A) it is relatively easy to raise financial capital for a proprietorship. B) a proprietorship is relatively easy to form and to dissolve. C) there are limits to the possible liabilities of the owner. D) depreciation rates on capital are higher.
Demand for a good becomes more elastic as:
a. the number of substitutes available declines. b. the time period under consideration becomes shorter. c. a good makes up a larger percentage of a consumer's budget. d. a good makes up a smaller percentage of a consumer's budget. e. the producer has more time to respond to price changes.
A country recently had a GDP of $1000 billion. Its consumption expenditures were $650 billion, its government spent $250 billion, and it had domestic investment of $150 billion. What was the value of this country's net capital outflow? Explain how you found your answer