What movement would show a change in autonomous expenditure?
What will be an ideal response?
Answer: Shifting up or down on the Y-axis (Real aggregate expenditure, AE)
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Assuming all excess reserves are loaned out, if the reserve ratio is 25 percent, the money multiplier will be equal to
A) 0.5. B) 2.5. C) 4. D) 5.
Which of the following statements is (are) correct? According to the Feldstein-Horioka Saving Investment Puzzle
a. countries with relatively low saving to income ratios have relatively high investment to income ratios. b. there is no correlation between investment and saving in developed countries. c. countries with a high ratio of saving to income have high ratios of investment to income. d. Both a and b
Figure 11-2
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In Figure 11-2, which movement would represent an improvement for all individuals?
A. A to B B. C to AC C. D to B D. A to D
A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. If the firm's profitmaximizing output level is 5 and its profit maximizing price is $15, what are its monopoly profits at this price and quantity?
a. $25 b. $50 c. $75 d. $100