Using the disposable income level at which the consumption function intersects the 45-degree line, we can identify
A. An inflationary gap to the right of the intersection point.
B. Dissaving to the right of the intersection point.
C. Dissaving to the left of the intersection point.
D. Full employment at the intersection point.
Answer: C
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The quantity theory of money was derived from the quantity equation by asserting that
A) real output was fixed. B) the money supply was fixed. C) the velocity of money was zero. D) the velocity of money was fixed.
Economists make assumptions to
a. mimic the methodologies employed by other scientists. b. minimize the number of experiments that yield no useful data. c. minimize the likelihood that some aspect of the problem at hand is being overlooked. d. focus their thinking on the essence of the problem at hand.
A fixed exchange rate system encourages speculators to attack weaker currencies.
Answer the following statement true (T) or false (F)
Will a monopolist produce at a quantity that is higher than the long-run competitive equilibrium output level?
A. No, profit maximization for a monopoly always occur at a lower output level than in a competitive market. B. Yes, the monopoly always produces at an output level larger than in a competitive market. C. Yes, but only if it is a monopoly because it holds a patent. D. There is no theory in microeconomics that states that a monopolist produces larger or smaller output than in a perfectly competitive firm in the long-run.