When there are few unemployed resources, additional spending will tend to
a. flow directly to the unemployed resources, so that the multiplier can be maintained at 1/1-mpc.
b. increase the marginal propensity to consume, and thereby increase the size of the multiplier.
c. increase the demand for resources and drive prices downward, increasing the size of the multiplier.
d. bid resources away from other activities and drive prices upward, reducing the size of the multiplier.
D
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We expect the demand curve in the perfectly competitive industry to be
A. negatively sloped. B. vertical. C. horizontal. D. perfectly elastic.
Suppose we observe people buying more of a good even though its price has risen. What would an economist conclude?
A) Impossible! We will never observe prices and quantity simultaneously rising in the real world. B) The demand curve for the good must be upward-sloping. C) The law of demand doesn't hold. D) The demand curve has shifted to the right. E) Consumption increasing as prices increase only occurs when a good is needed for survival.
The Great Depression:
A. resulted in the development of microeconomics. B. was a period of low production and high unemployment. C. occurred only in the United States. D. ended a few months after the stock market crash of 1929.
If a country experiences capital flight, which of the following curves shift right?
a. only the demand for loanable funds. b. only the supply of dollars in the market for foreign-currency exchange. c. only the net capital outflow curve and the supply of dollars in the market for foreign currency exchange. d. the demand for loanable funds, the net capital outflow curve, and the supply of dollars in the market for foreign currency exchange.