Countries with higher rates of saving
A. have a greater number of poor people.
B. have higher rates of growth.
C. experience lower growth rates in the future.
D. have a large population.
Answer: B
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What characterizes a competitive equilibrium?
A) Markets are rationed. B) Governments stay out of the market. C) Economic agents are price-takers. D) It is costly to experiment with policies.
Answer the following statement(s) true (T) or false (F)
1. Step 2 of the three-step method for monopolistic competition involves finding total cost. 2. If total revenue is greater than total costs at q*, the firm is generating total economic profits. 3. When there are economic losses, firms often enter the market. 4. If many firms producing similar products enter the market, the demand curve for existing firms producing this type of product will become less elastic. 5. If many sellers producing similar products leave the market, the demand curve for existing firms producing this type of product will shift to the right.
A decrease in the price level
A) shifts the AD curve to the right.
B) shifts the AD curve to the left.
C) causes an upward movement along the existing AD curve.
D) causes a downward movement along the existing AD curve.
E) none of the above
Which of the following would make the spending multiplier smaller?
A) a reduction in marginal propensity to save B) a small initial trade deficit C) a reduction in the marginal propensity to import D) a real appreciation E) none of the above