The model predicts a permanent decrease in government purchases causes:
a. an increase consumption.
b. an increases real GDP.
c. an increases the real interest rate.
d. all of the above.
Answer: a. an increase consumption.
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Which of the following statements is true?
A) The level of innovation is likely to be similar in an economy with inclusive institutions and an economy with extractive institutions. B) The number of entrepreneurs is likely to be higher in an economy with extractive institutions than an economy with inclusive institutions. C) The number of entrepreneurs is likely to be lower in an economy with extractive institutions than an economy with inclusive institutions. D) The level of innovation is likely to be similar in a command economy and a market economy.
Suppose demand decreases and supply decreases. Which of the following will happen?
a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium quantity will increase d. equilibrium quantity will decrease e. neither the equilibrium price nor the quantity will change
Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment.For Pat to earn normal profit, Pat's accounting profit would have to be ________.
A. $50,000 B. $0 C. $15,000 D. $35,000
An economic model is a:
A. realistic version of an economic environment. B. detailed version of an economic issue. C. fictional representation of an entire economy. D. simplified representation of an economic environment.