In the aggregate demand/aggregate supply model, a country's full-employment real GDP is represented by:
A. prices.
B. aggregate demand.
C. aggregate supply.
D. an increase in the general level of prices.
Answer: C
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If disposable income increases by $500 million, and consumption increases by $400 million, then the marginal propensity to consume is
A) 1.25. B) 0.8. C) 0.6. D) 0.4.
Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? a. Iceland has both a comparative and absolute advantage in producing food
b. Iceland has a comparative advantage, but not an absolute advantage in producing food. c. Lavaland has both a comparative and absolute advantage in producing clothing. d. Lavaland has both a comparative and absolute advantage in producing food.
Define decreasing returns to scale, illustrating your definition with isoquants. What are some reasons why firms might experience decreasing returns to scale?
What will be an ideal response?
Since the 1980s, banks and thrifts have lost their share of the financial services industry and control over financial assets.
Answer the following statement true (T) or false (F)