Based on our understanding of the model presented in Chapter 3, we know with certainty that an equal and simultaneous reduction in G and T will cause
A) an increase in output.
B) no change in output.
C) a reduction in output.
D) an increase in investment.
C
You might also like to view...
The difference between a capital good and a consumer good depends on
a. the purpose for which it is used. b. how it was produced. c. when it was produced. d. how quickly it is used up.
Compared to a monopolistic competitor, a monopoly producer who was currently earning economic profits: a. would face a more elastic demand curve
b. would face a less elastic demand curve. c. could continue to earn economic profits for a longer period of time. d. would be characterized by both (b) and (c).
Efficiency is an important social goal because:
A. movements toward economic efficiency make the total economic pie larger. B. it assures a normative outcome. C. it takes into consideration the distribution of income. D. it assures a fair outcome.
We know that products A and B are related goods, because when the price of A increases
A) the demand curve for B will shift to the right, because A and B are complementary goods. B) the quantity of B demanded will shift along its demand curve, because A and B are complementary goods. C) the demand curve for B will shift to the left, because A and B are complementary goods. D) the demand curve for B will remain unchanged because A and B are substitute goods.