A government subsidy to the producers of a product:
A. increases product demand.
B. reduces product supply.
C. reduces product demand.
D. increases product supply.
Answer: D
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Nominal GDP is calculated by using
A. prices set in a base year. B. average prices in all major cities. C. current prices. D. prices charged by initial producers.
Data on after-tax income and consumption spending for the Adam Smith family are given below:After-tax IncomeConsumption Spending9,00018,10014,00022,60019,00027,10024,00031,600Based on these data, the Adam Smith family has a marginal propensity to consume equal to:
A. 0.9. B. 0.6. C. 0.75. D. 0.8.
Interest rates will increase if the Fed conducts an open market purchase
Indicate whether the statement is true or false
If a competitive firm has a U-shaped marginal cost curve then
A) the profit maximizing output will always generate positive economic profit. B) the profit maximizing output will always generate positive producer surplus. C) the profit maximizing output is found where MC = MR and MC is decreasing. D) the profit maximizing output is found where MC = MR and MC is constant. E) the profit maximizing output is found where MC = MR and MC is increasing.