Given the aggregate demand curve, an increase in the supply of a productive resource will _____
Fill in the blank(s) with the appropriate word(s).
decrease the price level and increase the output level.
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The ceteris paribus assumption is a behavioral assumption.
a. True b. False
Assume a U.S. firm invests $1,500 to buy a one-year U.K. bond. What is the dollar value of the proceeds if the dollar return on the U.K. bond is 20 percent at maturity?
a. $1,800 b. $1,500 c. $1,200 d. $1,000 e. $500
Assume that a GDP gap can be closed by a $200 initial change in planned spending. The MPS is 0.3 and the MPI equals 0.1 . If the economy is currently in equilibrium with an income level of $600, potential GDP equals:
a. $1,600. b. $1,100. c. $800. d. $600. e. $400.
An entrepreneur probably will start a business if she sees an opportunity to sell an item at a price:
A. less than the competitors' price. B. equal to the competitors' price. C. equal to the average total cost of producing it. D. higher than the average total cost of producing it.