Output (Total Product) is maximized when
A) average productivity is at its maximum.
B) the "law of diminishing returns" sets in.
C) marginal productivity is zero.
D) marginal productivity is at its maximum.
C
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Price elasticity of demand is useful because it measures __________ responsiveness to changes in __________
a. taxpayers'; demand b. producers'; supply c. consumers'; price d. consumers'; demand e. producers'; income
In a closed economy, if Y is 10,000, T is 1,000, G is 3,000, and C is 5,000, then
a. the government has a budget surplus and investment is 1,000 b. the government has a budget surplus and investment is 2,000 c. the government has a budget deficit and investment is 1,000 d. the government has a budget deficit and investment is 2,000
If the GDP gap is $400 billion and AS is upward-sloping, an effective fiscal policy would be to increase aggregate demand by $400 billion.
Answer the following statement true (T) or false (F)
Stabilization of business cycle fluctuations focuses on the long run
Indicate whether the statement is true or false