An economy has no imports or income taxes. An increase in autonomous expenditure of $40 billion increases equilibrium expenditure by $160 billion. The expenditure multiplier equals
A) 2. B) 8. C) 6. D) 16. E) 4.
E
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When an average cost pricing rule is imposed on a natural monopoly, ________
A) total surplus is maximized and the monopoly incurs an economic loss B) the monopoly makes zero economic profit C) the monopoly makes an economic profit D) total surplus is maximized and the monopoly makes an economic profit
Suppose we have an economy in which G = 1100, t = 0.26, Y = 3800, and YN = 4000. At Y, the actual deficit is
A) 60. B) 200. C) 112. D) 286. E) -60.
In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007 . A hamburger cost $5 in 2006 and $6 in 2007 . Which of the following statements is correct?
a. When 2006 is chosen as the base year, the consumer price index is 90 in 2007. b. When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007. c. When 2007 is chosen as the base year, the consumer price index is 100 in 2006. d. When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007.
A mechanism for fixing exchange rates is the
A. Flexible exchange standard. B. Gold standard. C. WTO agreement. D. International Monetary Fund.