In which of the following situations for a mixed open economy will the level of GDP expand?
A. When I g + X + G exceeds S a + M + T.
B. When S a + T + M exceeds I g + G + X.
C. When GDP exceeds C a + I g + G + X n .
D. When I g + M + T exceeds C a + X + S.
A. When I g + X + G exceeds S a + M + T.
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Suppose we observe a substantial increase in the price of a good, and, at the same time, an increase in the quantity of the good demanded. What can we conclude?
A) The law of supply is untrue. B) Consumers haven't followed the law of demand. C) The demand curve has shifted to the right. D) The good is a luxury good.
By the permanent-income hypothesis, the MPC of transitory income is
A) k. B) j. C) kj. D) k - j. E) 0.
In arriving at the quantity of output and price of its product, a company
A. chooses both price and quantity, since it understands its demand relationship. B. cannot set price or quantity; this is done by the market. C. makes two separate decisions about quantity and product price. D. can set price but quantity is determined by market demand.
When a firm produces 1000 widgets with total cost of $2000 and fixed cost of $1000, what is the average variable cost?
A) $2 B) $1 C) $0.50 D) $0.20