Within the framework of the Keynesian model, if aggregate expenditures exceed aggregate output, then:
a. the inventories of firms would decline, and the firms would expand output in order to restore their inventories to desired levels.
b. the inventories of firms would increase, and the firms would reduce output until inventories were cut back to the desired level.
c. the current level of income would persist in the future.
d. firms would reduce their investment, and the economy would fall into a recession.
a
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A rise in the price of a substitute in production for a good leads to
A) an increase in the supply of that good. B) a decrease in the supply of that good. C) no change in the supply of that good; instead there is a change in the quantity supplied. D) a decrease in the quantity of that good supplied. E) no change in either the supply or the quantity supplied of the good.
To develop a competitive advantage and increase their firm's profitability, managers need to understand what affects their revenues, costs, and their ability to set prices
Indicate whether the statement is true or false
Assume the price of beer is $4, the price of pizza is $10 and the consumer's income is $250. Which consumption bundle will NOT be the consumer's choice?
A) A (5 Beers, 5 Pizzas) B) B (0 Beers, 25 Pizzas) C) C (25 Beers, 15 Pizzas) D) None of the above bundles will be chosen.
Which of the following examples would most likely be an unintended consequence of rent control?
a. Most of the apartments in a building are vacant. b. A landlord is known for renting to people who often are considered “undesirable.” c. Most of the apartments in a building are in a deteriorated state. d. A landlord decides to put in new plumbing for an entire apartment complex.