Changes in nominal GDP always reflect changes in real output.
Answer the following statement true (T) or false (F)
False
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An increase in the marginal propensity to import will
A) raise imports and raise equilibrium income. B) lower imports and raise equilibrium income. C) lower the multiplier and reduce equilibrium income. D) raise the multiplier and reduce equilibrium income.
The accelerator principle relates the level of investment to changes in the level of national income
Indicate whether the statement is true or false
Firms in the market for dog food are selling in a purely competitive market. A firm producing dog food has an output of 10,000 pounds of dog food, for which it sells for $0.50 a pound. At the output level of 10,000 pounds the average variable cost is
$0.30, the average total cost is $0.70, and the marginal cost is $0.50. What would you expect the firm to do in the short run? The market in the long run? What will be an ideal response?
The U.S. economy has had persistent inflation in recent decades. A possible explanation for the inflation is that
A. there have been decreases in aggregate demand while aggregate supply has remained unchanged. B. there have been increases in the growth rate while aggregate demand has remained unchanged. C. there have been decreases in the growth rate while aggregate demand has remained unchanged. D. growth in aggregate demand has been greater than growth in aggregate supply.