Suppose real GDP is $14 trillion and potential real GDP is $14.4 trillion. An increase in government purchases of $400 billion would cause real GDP to ________ potential real GDP (assuming a constant price level)
A) be less than
B) be more than
C) equal
D) There is insufficient information given here to draw a conclusion.
B
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If real wages fall:
A) consumer demand is likely to increase. B) employers are likely to hire more workers. C) the level of economic production will always increase. D) the level of economic production will always decrease.
If marginal cost is increasing, then average variable cost must be increasing simultaneously.
a. true b. false
Which of the following macroeconomic variables is not procyclical?
A. Business fixed investment B. Stock prices C. Unemployment rate D. Average labor productivity
Marginal revenue equals marginal cost at an output of 20 units. At this output, marginal revenue equals $20, average variable cost equals $15, and average total cost equals $25. In the short run, a profit-maximizing firm will earn a profit of
A. -$200. B. -$100. C. $200. D. $400.