If the economy is simultaneously in long-run and short-run equilibrium, which of the following is true?
a. Aggregate quantity supplied is greater than potential output.
b. Aggregate quantity demanded is less than potential output.
c. Aggregate quantity demanded is equal to potential output.
d. The aggregate demand curve is horizontal at the potential output level.
C
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If the multiplier is 10, then the marginal propensity to consume (MPC) is
A) 9. B) 1. C) 0.9. D) 0.1.
If the production technology in a Robinson Crusoe economy has increasing returns to scale, there is not competitive equilibrium.
Answer the following statement true (T) or false (F)
Sustained economic growth generally occurs when a nation
A) abandons the market system in favor of central economic planning. B) abandons the rule of law in favor of a series of licenses, regulations, and tariffs to control and protect the domestic economy. C) subsidizes loss-generating enterprises and thereby preserves jobs and incomes. D) creates conditions where people are free to specialize and exchange.
The United States had the largest real GDP per person until the 2012 when the China's real GDP per person overtook and then exceeded that in the United States
Indicate whether the statement is true or false