Using the IS-MP model, explain what happens to output and the real interest rate when the IS curve shifts to the right and when it shifts to the left, and when the MP curve shifts up and when it shifts down?
What will be an ideal response?
All else equal, when the IS curve shifts to the right, output increases and the real interest rate does not change, and when the IS curve shifts to the left, output decreases and the real interest rate does not change.
All else equal, when the MP curve shifts up, output decreases and the real interest rate increases, and when the MP curve shifts down, output increases and the real interest rate decreases.
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Which of the following situations describing a resource allocation method most resembles the force method?
A) Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not. The club purchased the sets. B) Lattes are sold at Starbucks. C) Food from the Weld County Food Bank is distributed to families in need. D) Mandy saved her allowance to buy a 12 pack of cream soda. When Mandy's brother saw the soda, he took four. E) Jose works at Intel. His manager tells him what work needs to be completed each month.
If additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be linear
Indicate whether the statement is true or false
If an incumbent faces an identical potential entrant with no costs of entry, the incumbent will
A) produce the Cournot duopolist level of output. B) produce the Stackelberg leader level of output. C) set price equal to marginal cost. D) shut down.
Explain how the Social Security program affects economic output.
What will be an ideal response?