If the marginal propensity to consume is 0.75 and the desired amount of increase in real GDP is $240 billion, then by how much would government spending have to increase?
a. $240 billion
b. $80 billion
c. $60 billion
d. $30 billion
c
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The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?
When the prevailing market wage is above equilibrium, we say:
A. the quantity of labor demanded is more than the quantity supplied. B. there is a surplus of labor. C. there is no unemployment. D. All of these are true.
The finite nature of the economy's resource base:
A. will be solved if only we would learn to conserve. B. is only a problem in developing countries. C. will be solved as technology advances. D. will always be with us.
Which is an important aspect of the perfectly competitive market that leads to long run equilibrium?
A) perfect information B) freedom of entry and exit C) price taking behavior D) homogeneous products