The equation for the spending multiplier is:
a. 1 / (1 ? MPC).
b. 1 ? MPC.
c. 1 ? (MPC ? MPS).
d. MPC/MPS.
e. none of these.
a
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According to the Hotelling Principle, the price of a nonrenewable resource is expected to
A) rise at a rate higher than the interest rate. B) rise at a rate lower than the interest rate. C) rise at a rate equal to the interest rate. D) fall at a rate equal to the interest rate.
An adverse supply shock causes the short-run aggregate supply curve to shift left, increasing the price level
Indicate whether the statement is true or false
For a fixed target real interest rate and target inflation rate, when inflation decreases, the Fed ________ interest rates, hence ________ short-run equilibrium output.
A. increases; increasing B. decreases; decreasing C. increases; decreasing D. decreases; increasing
"In the long run, a perfectly competitive firm's average total cost is always below the market clearing price." Agree or disagree? Why?
What will be an ideal response?