Imagine an economy that does not have international trade and is initially in equilibrium. Later the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 65 cents of every dollar is spent, and the rest is saved. What is the marginal propensity to save for this economy?
a. 0.5
b. 0.25
c. 0.65
d. 0.35
e. Cannot be determined
d
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As long as the firm illustrated above remains open, it will set a price of ________ per month and it will ________
A) $50; earn an economic profit B) $50; incur an economic loss C) $40; earn an economic profit D) $40; incur an economic loss E) less than $20; incur an economic loss
A simple macroeconomic model might explain how an increase in the demand for new housing would lead to a decrease in the rate of unemployment. In such a model, which of these variables is likely to be exogenous?
A) the quantity sold of home furnishings B) the degree of unionization of the construction industry C) the wage rate for unskilled workers D) the level of tax revenues E) the demand for concrete
As the price of land decreases along its demand curve, the relative price of land
a. increases because the prices of other resources have also decreased b. decreases because the prices of other resources have also decreased c. increases because the prices of other resources have increased d. decreases because the prices of other resources are held constant e. remains constant because the prices of other resources also increase
If all developed countries were willing to meet the U.N.'s Millennium Aid Goal for foreign aid, this would eliminate global poverty.
Answer the following statement true (T) or false (F)