Investment spending is
A) directly related to the interest rate.
B) inversely related to the interest rate.
C) directly related to real disposable income.
D) inversely related to real disposable income.
Ans: B) inversely related to the interest rate.
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In the short run a firm should shut down if it cannot
A) make normal profits. B) make economic profits. C) cover its variable costs. D) cover its fixed costs.
Of the three levels of government in the United States,
a. only the federal government provides public goods b. only the federal government has the power to tax c. local governments are primarily responsible for primary and secondary education d. the federal government is primarily responsible for higher education e. state governments are primarily responsible for economic stability
Which of the following is most likely to happen if the Federal Trade Commission (FTC) wins a suit against alleged violators of antitrust law?
a. The FTC will receive compensation up to three times the damage caused. b. The FTC will not be able to impose substantial penalties. c. The FTC will force firms to break up through dissolution. d. The FTC will force firms to merge together. e. The FTC will file criminal actions that may result in fines but not prison sentences.
Suppose that Amber's demand for gasoline is given by G = 1000 - 200PG, where G stands for gallons of gas and PG represents the price of gas. (a) Suppose gas sells for $2 per gallon. What is Amber's consumer surplus? Illustrate your answer graphically. (b) Suppose the price of gas rises to $3 per gallon. What is the change in Amber's consumer surplus? Illustrate this change in your graph
What will be an ideal response?