Suppose that government purchases of goods and services increase by $200 and at the same time lump-sum taxes increase by $200 . Which of the following is true in this case?
a. Whether the budget deficit will increase or decrease will depend on the value of the marginal propensity to consume.
b. The budget deficit will increase by $200
c. The budget deficit will increase by $400.
d. The budget deficit will decrease as the economy expands.
e. There will be no change in the budget deficit.
d
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If the market price falls from P0 to P1 in the above figure, then
A) a new equilibrium quantity is established. B) there is a shortage equal to the distance EF. C) there will be a further tendency for price to fall. D) there is a surplus of goods on the market equal to the distance Q1, Q2.
Which of the following are necessary characteristics of a monopoly? (i) The firm is the sole seller of its product. (ii) The firm's product does not have close substitutes. (iii) The firm generates a large economic profit. (iv) The firm is located in a small geographic market
a. (i) and (ii) only b. (i) and (iii) only c. (i), (ii), and (iii) only d. (i), (ii), (iii), and (iv)
Foreign exchange market intervention involves the purchase or sale of currencies by governments to influence the market exchange rate
Indicate whether the statement is true or false
If the CPI at the end of last year was 100 and the CPI at the end of this year was 115, the inflation rate was
A) 1.5 percent. B) 15 percent. C) 100 percent. D) 115 percent.