Refer to the information. The equilibrium level of GDP in this economy is:
Answer the question on the basis of the following information for a private closed economy where C is consumption, Y is the gross domestic product, I g is gross investment, and i is the interest rate:
A. $240.
B. $300.
C. $360.
D. $400.
D. $400.
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What best explains why real GDP per person is always driven to the subsistence level in the classical model?
A) Population growth occurs, increasing the supply of labor. B) Population growth occurs, shifting the labor supply curve leftward. C) Growth is not possible so the demand for labor never changes. D) Investment in capital decreases labor demand, decreasing the demand for labor.
In the long run, an increase in the growth rate of the money supply causes the inflation rate to ________, which then causes the nominal interest rate to ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Andrew buys yogurt, and he would be willing to pay more than he now pays. Suppose that Andrew has a change in his tastes such that he values yogurt more than before. If the market price is the same as before, then
a. Andrew's consumer surplus would be unaffected. b. Andrew's consumer surplus would increase. c. Andrew's consumer surplus would decrease. d. Andrew would be wise to buy less yogurt than before.
When a business such as an airline charges different prices for different people for the same product, they are practicing
A. an illegal price policy. B. price discrimination. C. non-price competition. D. a marketing policy which usually backfires.