Consumer will always consume more of a good if their income increases
a. True
b. False
Indicate whether the statement is true or false
False
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Comdex Computer Company is producing at a price of $10 with an average total cost of $12and a fixed cost of $300 . The firm is currently producing 100 units
What are the operating profits of this firm? What are the economic profits of this firm?
All of the following are possible explanations for why it took so long for trade balances to respond to the depreciation of the dollar EXCEPT
A) the prior increase in the value of the dollar had padded the profit margins of foreign producers. B) foreign trade barriers made it impossible for the United States to substantially expand exports it bought. C) there were still impacts from earlier appreciations working through the system. D) exports began to increase from a much lower base than imports. E) None of the above. That is, A, B, C, and D are all correct.
Politicians often instruct households to spend in order to help the economy. This advice overlooks the fact that
a. increases in consumption will make it easier for households to deal with unanticipated future expenses. b. increases in consumption will provide more loanable funds for investment. c. you cannot have a strong economy if all or most households are spending just about everything they earn. d. consumer spending is less than two-thirds of GDP.
How does an increase in government transfer payments affect aggregate demand?
A. It has the same effect as a tax increase, which lowers AD with a larger multiplier than a spending decrease. B. It has the same effect as a tax cut, which increases AD but with a smaller multiplier than a change in spending. C. It has the same effect as a spending increase, which increases AD with a larger multiplier than a tax cut. D. It has the same effect as a spending decrease, which increases AD with a larger multiplier than a spending decrease.