In the classical model where aggregate supply is vertical with respect to the price level, an increase (shift) in aggregate demand will yield
A. a relatively large increase in output.
B. an equal change in output.
C. a relatively large increase in the price level.
D. a relatively small change in the price level.
C. a relatively large increase in the price level.
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What factor probably contributes most to economic growth?
A) Money B) Political influence C) Foreign aid and investment D) The exploitation of poor countries by rich countries E) Productive knowledge
The above (incomplete) table provides information about the relationships between output and various cost measures. The marginal cost per unit when increasing output from 14 to 17 units is
A) $20. B) $30. C) $380. D) None of the above answers is correct.
A firm that buys foreign exchange in order to take advantage of higher foreign interest rates is
A) speculating. B) demonstrating purchasing power parity. C) engaging in interest rate arbitrage. D) responding to fluctuations in the business cycle. E) ignoring the nominal rate of exchange.
Under a regressive tax, the fraction of income paid in taxes
A. rises as income rises. B. is unchanged as income changes. C. falls as income rises. D. is proportional to the change in income.