Use the following information to answer the next several questions:Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2016, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively. Based on the information in Scenario 1, real GDP in 2016 (in 2015 dollars) in this economy was:
A. $830.
B. $1,025.
C. $1,090.
D. $1,345.
Answer: B
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
According to Keynesian economic theory, the government should spend money to pay down the national debt.
a. during an economic depression. b. in order to balance the budget. c. only if it is willing to raise taxes. d. on the military instead of on domestic issues.
After a nation starts importing a good from overseas, the domestic price of the good
A) stays the same. B) rises. C) falls. D) might change, but more information about what the country exports is needed to determine if the price rises, falls, or does not change. E) might change, but more information about what else the country imports is needed to determine if the price rises, falls, or does not change.
Refer to the table below. If the cost per unit of advertising is constant at $750, what is the level of advertising per week that maximizes the industry joint profit?
Suppose the egg industry is made up of only the three farms above; Happy Chickens, Special Chickens, and Superior Chickens.
A) 4
B) 2
C) 3
D) 1