Joe is maximizing utility by consuming three colas at $2 apiece and four hot dogs at $3 apiece. The last cola gave him 200 units of utility. How many units of utility did the last hot dog give him?
A. 300
B. 133.33
C. 600
D. 10
Answer: A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If businesses found that changing economic conditions made it attractive for them to hire a larger number of economics majors, we would expect
a. economics majors to receive a greater return on their human capital investment. b. a decrease in the employment opportunities for economics majors. c. lower wages for economics majors. d. fewer students to major in economics.
Real gross domestic product (GDP) increases if
a. current prices increase b. current quantities increase c. current prices are constant d. nominal GDP increases e. nominal GDP decreases
We use the term expansionary fiscal policy when the overall effect of decisions about taxation and spending is to:
A. increase aggregate demand. B. decrease aggregate supply. C. increase aggregate supply. D. decrease aggregate demand.