An increase in the price of the good measured on the horizontal axis of a budget line diagram will
a. make the budget line flatter
b. make the budget line steeper
c. leave the budget line unchanged
d. cause a parallel inward shift of the budget line
e. cause a parallel outward shift of the budget line
B
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In 1940, military spending amounted to roughly _____ of GDP; by 1943, it had risen to roughly ________ of GDP
a. 20 percent; 30 percent b. 2 percent; 40 percent c. 15 percent; 20 percent d. 1 percent; 25 percent
A rise in interest rates leads to:
a. an increase in the PDV of profits from owning a machine. b. a decrease in the PDV of profits from owning a machine. c. offsetting the effects on the costs and benefits of owning a machine. d. no effect on either the costs or benefits of owning a machine.
Average fixed cost:
A. equals marginal cost when average total cost is at its minimum. B. graphs as a U-shaped curve. C. declines continually as output increases. D. may be found for any output by adding average variable cost and average total cost.
Which of the following best describes the cause-effect chain of an expansionary monetary policy?
A. A decrease in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP. B. A decrease in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP. C. An increase in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP. D. An increase in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP.