Part of the normal aftermath of a period of excessive aggregate demand is
A. improvement in the quality of life.
B. reflation.
C. real GDP growth.
D. stagflation.
E. All of these responses are correct.
Answer: D
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The March 2000 "tech bubble" burst caused the aggregate demand curve to shift to the left by ________
A) causing an upward spike in the real interest rate B) reducing autonomous spending by households and businesses C) reducing government spending on high-tech equipment D) all of the above E) none of the above
Suppose your neighbor likes to repair motorcycles in his front yard during evenings and on weekends, and he earns $400 per week from this work
However, the sight of piles of greasy motorcycle parts and the additional noise and traffic caused by his customers reduces your value of living in this neighborhood by $300 per week. If your neighbor has a right to operate this business, what is the efficient outcome? A) He continues to operate the business. B) You can pay him to move the business to another location. C) He pays you to let him continue working on motorcycles at his home. D) There is no efficient outcome from this situation.
A budget constraint:
A. shows a constant dollar amount spent on different combinations of goods, and each bundle brings the same utility. B. shows a constant dollar amount spent on different combinations of goods, and each bundle brings a different amount of utility. C. shows a constant amount of utility gained by consuming different combinations of goods, and each bundle costs the same. D. None of these is true.
When a natural monopoly is? inevitable, the government often sets a maximum price that the monopolist can charge consumers. Under an average ?-cost pricing? policy, the government picks the price at which the market demand curve intersects the? monopolist's long ?-run ?average-cost curve. The firm will earn a normal profit.
When a natural monopoly is? inevitable, the government often sets a
price that the monopolist can charge consumers. Under
pricing? policy, the government picks the price at which the
curve intersects the? monopolist's
?average-cost curve. The firm will earn
profit.