When spending by the federal government exceeds net taxes, _____
Fill in the blank(s) with the appropriate word(s).
the aggregate demand curve shifts rightward.
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Answer the following statement(s) true (T) or false (F)
1. In a model that analyzes the effects of a tax change, the tax serves as an endogenous variable. 2. The embarrassment theory suggests why shopping carts should be smaller. 3. An economic model, even if unrealistic, is useful as long as it makes predictions that are realistic. 4. Efficiency is the only criterion by which economists judge policies. 5. All points on a risk-neutral individual's indifference curve have the same expected value.
Consider the two graphs above. Suppose that technological progress is expected to reduce the future cost of capital goods. This would ________ the desired level of the capital stock, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
Farmer Brady sells wheat in a market where sellers are price takers. Which of the following is true in regard to Farmer Brady's production and pricing decisions?
a. Farmer Brady will be able to increase the total revenue from the sale of his wheat if he increases the price of the wheat. b. Since the market dictates the price of his product, Farmer Brady will have no incentive to minimize per-unit production costs. c. Since the market dictates the price of his product, Farmer Brady has no production decisions to make. d. It would be senseless for Farmer Brady to try to increase sales by lowering the price of his product. His entire output can be sold at the market price.
Suppose that the quantity of apples sold increases by 30 percent after the price of pears increases by 15 percent. What is the coefficient of cross elasticity of demand?
a. 3.0 b. 1.5 c. 0.2 d. 2.0 e. 0.3