Which of the following would increase the size of the government purchases multiplier?
A) an increase in the tax rate
B) an increase in the quantity of imports purchased by households from an increase in income
C) a decrease in the amount of consumption spending by households from an increase in income
D) a decrease in the amount saved by households from an increase in income
Answer: D
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Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs. The company earns $1.4 million in revenues and has $3.7 million in net worth. Based on this information, what is the economic profit for Harry's Hookas?
A) $200,000 B) $700,000 C) $900,000 D) $1.1 million
According to the theory of rational expectations, errors in predicting inflation will
a. be biased upward more often than not. b. be purely random. c. tend to be biased downward when inflation is rising, and tend to be biased upward when inflation is falling. d. tend to be biased upward when inflation is rising, and tend to be biased downward when inflation is falling.
"Free trade benefits one country at another country's expense." Evaluate this statement using economic analysis
Which of the following is not a function of money?
a. Standard of deferred payment. b. Medium of exchange. c. Legal tender. d. Store of value. e. All of the above are functions of money.