According to the Keynesian model, an increase in autonomous investment leads to
A) a more than proportional decrease in real Gross Domestic Product (GDP).
B) a less than proportional decrease in real Gross Domestic Product (GDP).
C) a proportional increase in real Gross Domestic Product (GDP).
D) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).
A
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Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. If there is a decrease in the supply of good X, which of the following will happen in the market for good Y in the long run?
A) Firms will exit, causing market price to rise. B) Firms will enter, causing market price to fall. C) Price will be higher at the new long-run equilibrium as a result of entry into the market. D) The firms that were already in the industry will continue to earn positive economic profit.
The optimal sharing group for national defense is the size of a nation
a. True b. False
Economists who focus on long-run growth suggest that the government could lower taxes on labor income in order to increase employment
a. True b. False
Suppose that government used to requires airline companies to have at least 30 airplanes and serve at least 20 different airports. Now, this requirement changed to a minimum of 10 airplanes and 4 different airports. Such change in regulation will lead to
A) lower profits due to increased competition. B) higher profits due to decreased competition. C) higher profits due to weaker labor unions. D) lower profits due to larger regulatory burden.