Suppose there is a $200 billion increase in government spending. We know that this increase in government spending will cause which of the following to occur?
A) equilibrium real GDP will increase by exactly $200 billion.
B) an increase in equilibrium real GDP and an increase in the multiplier.
C) an increase in equilibrium real GDP and a reduction in the multiplier.
D) an increase in equilibrium real GDP and no change in the multiplier.
D
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Which of the following firms is most likely to be a perfectly competitive firm?
a. one of the three largest U.S. automakers b. one of the "Seven Sisters" oil producers c. a public school operated by the government d. a soybean farmer e. a manufacturer of refrigerators
Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has
a. caused GDP to fall. b. not caused any change in GDP. c. caused GDP to rise. d. probably changed GDP, but in an uncertain direction; the direction of the change depends on the difference in the quality of the cleaning that has resulted.
A positive externality
a. is a benefit to the producer of the good. b. is a benefit to the consumer of the good. c. is a benefit to someone other than the producer and consumer of the good. d. results in an optimal level of output.
In the long run, when marginal cost is above average total cost, the average total cost curve exhibits
a. economies of scale. b. diseconomies of scale. c. constant returns to scale. d. efficient scale.