An increase in autonomous consumption ________
A) lowers planned expenditures
B) raises equilibrium output for any level of the interest rate
C) causes a movement down along the IS curve
D) all of the above
E) none of the above
B
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The effective coordination of social behavior through voluntary exchange depends significantly upon
A) clearly defined property rights. B) such civic virtues as courtesy and tolerance. C) well-established and generally accepted rules regarding behavior. D) all of the above.
An increase in foreign incomes
A) increases aggregate demand in the United States. B) increases the aggregate quantity demanded in the United States. C) decreases the aggregate quantity demanded in the United States. D) decreases aggregate demand in the United States.
To avoid the free-rider problem, which of the following goods is best provided by the government and paid for with tax dollars?
A. automobiles B. lighthouses C. bread D. windows
Refer to the graph below. All data are for the short run. If the product price is P2, the firm will:
A. Close down to avoid a loss
B. Produce Q2 units and make an economic profit
C. Produce Q5 units and break even
D. Produce Q2 units and suffer a loss