(Advanced analysis) Assume that the MPC is .8 in an economy that has an aggregate supply curve with a slope of 1. Also, suppose that the price level is flexible downward. A decrease in investment spending of $10 billion will shift the aggregate demand
curve leftward by:
A. $50 billion and decrease real GDP by $50 billion.
B. $50 billion and decrease real GDP by $25 billion.
C. $10 billion and decrease real GDP by $10 billion.
D. $10 billion and decrease real GDP by $25 billion.
B. $50 billion and decrease real GDP by $25 billion.
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Esther and Albert produce hamburgers and hot dogs. Esther can produce six hamburgers per hour or four hot dogs per hour. Albert can produce three hamburgers per hour or one hot dog per hour. Based on the scenario, Esther's opportunity cost for one hamburger is:
a. 2/3 hot dog. b. 1 hot dog c. 6 hot dogs d. 4 hot dogs e. 8 hot dogs
Consider a market that is in equilibrium. If it experiences a decrease in supply, what will happen? The supply curve will shift to the:
A. left and the equilibrium price and quantity will rise. B. left and the equilibrium price will increase and the equilibrium quantity will decrease. C. left and the equilibrium price and quantity will fall. D. right and the equilibrium price and quantity will fall.
An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600. What is the industry's HHI?
A. 1,659 B. 1,909 C. 1,839 D. 1,779
The amount of one currency that must be paid to obtain one unit of another currency is the ________________.
Fill in the blank(s) with the appropriate word(s).