Suppose a country increases government purchases by $700 billion. Suppose the government spending multiplier is 2 and the economy's real GDP is $6,000 billion. This policy action shifts the aggregate demand curve to the right by
A) $12,000 billion.
B) $3,000 billion.
C) $1,400 billion.
D) $350 billion.
Ans: C) $1,400 billion.
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Present value analysis suggests that the real rate of return on Social Security is
A. around 10% for workers of all income levels. B. roughly 3% for high-income earners and negative for low-income earners. C. more than 10% for high-income earners. D. roughly 3% for low-income earners and negative for high-income earners.
Which of the following demonstrates the endowment effect?
A) If you received a good as a gift, you are less likely to attach a monetary value to the good. B) Isabella was not willing to part with her "Chris Hemsworth" poster although she was offered $100 for it, a sum greater than what it costs to purchase another such poster. C) Chris Hemsworth commands a premium in the movie industry because he is endowed with dashing looks. D) Whelan inherits a cottage in Cape Cod from his grandfather and is unwilling to sell it for sentimental reasons.
Acme, Inc. is currently producing 12,000 gadgets per year. Acme's average total cost (ATC) is $18 per year. What is Acme's total cost (TC) per year?
a. $667 b. $108,000 c. $216,000 d. $500 e. $1500
Which concept would be addressed by microeconomics?
a) the price of college tuition that an individual student pays b) the reasons for a decline in a country's total output c) the national unemployment rate d) the inflation rate in Brazil