The formula for the aggregate consumption function is [C = a + b(Y - T)] ________ the income-expenditure model.
A. after net exports are added to
B. when consumption is left out of
C. after government is subtracted from
D. after government is added to
Answer: D
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Suppose unregulated production of pesticides results in an equilibrium price and quantity of $400 and 1,000 tons per day, respectively, and a marginal external cost of $10 a ton
a) If the government were to eliminate the external cost by using taxes, what should the tax equal? b) Would the government action described above affect the quantity of pesticides produced? If yes, how? If no, why not?
The production approach to measuring GDP requires ________
A) that the market value of a given good is a reasonable approximation of its economic value B) that all goods and services be added up before assigning a market value C) that no good or service rendered outside the market be included in GDP D) all of the above E) none of the above
Capital deepening occurs when
a. consumption and immigration increase b. capital-labor ratio increases c. employment increases d. saving increases and investment decreases e. the number of workers increases and investment decreases
The aggregate supply curve slopes upward because as price rises the quantity of output supplied rises
a. True b. False Indicate whether the statement is true or false