Household saving is the defined as consumption minus disposable income
a. True
b. False
B
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List five major economic activities of government, and give an example of each.
What will be an ideal response?
Suppose that consumers expect the price of a product to decrease in the future. The result is that
A) the current demand for the product increases. B) the current demand for the product decreases. C) the current supply of the product decreases. D) the current supply of the product increases.
Suppose that the economy is operating in full-employment equilibrium along the vertical section of the aggregate supply curve. If the aggregate demand curve is reduced by $100 billion in order for the price level to decline by 5 percent, and if the marginal propensity to consume (MPC) is 0.75, then what change in taxes would generate the desired price reduction?
a. $300 billion. b. -$75 billion. c. -$33.3 billion. d. -$25 billion.
Why might the government impose regulations on monopolistically competitive firms?
a. to make them less like monopolies b. to make them more like perfectly competitive firms c. to make them less like perfectly competitive firms d. to make more like non-profit organizations