Before they can be used in regular exchanges, the assets that make up M2 must often
A) be paid off if they are credit cards. B) be converted to M1 assets.
C) have their interest computed. D) have reached term if they are insurance policies.
B
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Refer to Figure 23-4. Potential GDP equals $100 billion. The economy is currently producing GDP1 which is equal to $90 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?
A) -$18 billion B) -$2 billion C) $2 billion D) $18 billion
Supply and demand both tend to be more elastic in the long run and more inelastic in the short run
a. True b. False Indicate whether the statement is true or false
At a price of $5, quantity demanded is 70; and at a price of $7, quantity demanded is 50. Since total revenue ________ by the price increase, demand must be ________.
A. is unchanged; elastic B. is increased; elastic C. is decreased; inelastic D. is unchanged; unit elastic
If the average variable cost curve is above the marginal cost curve, then
A. average variable costs must be increasing. B. marginal costs must be increasing. C. marginal costs must be decreasing. D. marginal costs can be either increasing or decreasing.