Personal saving is equal to
A. consumption minus disposable income.
B. disposable income minus consumption.
C. disposable income plus consumption.
D. consumption divided by disposable income.
Answer: B
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Perfectly competitive firms are earning economic profits at a market price of $12 and an average total cost of $10. If new firms enter and do not affect the cost for all firms, the market price will ________ until it reaches ________.
A) increase; $16 B) decrease; $10 C) decrease; $11 D) increase; $13
When the U.S. economy is at its full-employment level, the unemployment rate is not equal to zero because:
a. cyclical unemployment is always present in a modern economy. b. of the statistical discrepancy. c. voluntary unemployment is always positive. d. frictional and structural unemployment are always present in a modern economy. e. there are always people who are too lazy to work.
All else equal, which of the following would tend to cause real GDP per person to rise?
a. a change from inward-oriented policies to outward-oriented policies b. an increase in investment in human capital c. strengthening of property rights. d. All of the above are correct.
If the economy is in equilibrium, how can a recessionary gap exist, and how will producers respond to this gap?
What will be an ideal response?