Keynesian macroeconomic theory has been summarized as the idea that
A. supply creates its own demand.
B. demand creates its own supply.
C. demand quickly adjusts in order to accommodate changes in the quantity of output.
D. full employment is assured in long-run equilibrium.
B. demand creates its own supply.
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Goldie is indifferent between option A, which gives her $9,000 for sure, and option B, which gives her $3,000 with probability 1/3 or $18,000 with probability 2/3. Goldie's cost of risk for option B is
A) zero. B) $1,000. C) $3,000. D) $4,000.
Total utility is maximized in the consumption of two goods by
A) maximizing expenditure on each good. B) equating the marginal utility for each good consumed. C) equating the total utility of each good divided by its price. D) equating the marginal utility per dollar for each good consumed.
Suppose that Year 2 is the base year. What is the growth rate of GDP?
A) 44.4% B) 58% C) 67.5% D) 120%
If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then
a. Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. b. Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. c. Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. d. Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.