Microeconomics focuses on:
A.) Full employment, price stability, and economic growth.
B.) The behavior of individuals, firms, and government agencies.
Land, labor, and capital.
Centrally planned economies.
B.) The behavior of individuals, firms, and government agencies.
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Total expenditure by a buyer is equal to the
a. slope at any point along the demand curve. b. price times quantity demanded at any point along the demand curve. c. elasticity times price at any point along the demand curve. d. elasticity times quantity demanded at any point along the demand curve.
Suppose lower interest rates suddenly lead to an injection of $325 additional investment spending into the economy and the marginal propensity to consume is 0.80.Table 10.1Spending CyclesChange in this Cycle's Spending and IncomeCumulative Increase in Spending and IncomeFirst-cycle spending$325$325Second-cycle spending________________Third-cycle spending________________In Table 10.1, what will be the total increase in aggregate demand resulting from the initial $325 increase in investment expenditure after an infinite number of cycles?
A. $3,965. B. $1,625. C. $325. D. $1,040.
The Fed's two main monetary policy targets are
A) the money supply and the inflation rate. B) the money supply and the interest rate. C) the interest rate and real GDP. D) the inflation rate and real GDP.