In monopolistic competition and ________, economic profit will move towards zero.
A. monopoly
B. perfect competition
C. natural monopoly
D. oligopoly
Answer: B
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A country will have a balance-of- payments deficit when its exchange rate:
A. equals the market equilibrium value. B. is undervalued. C. is overvalued. D. is flexible.
In the traditional Keynesian model, an increase in government spending raises total planned real expenditures by more than the original increase in government spending because
A) of the crowding-out effect on consumption spending. B) consumption spending is not related to real GDP. C) consumption spending depends positively on real GDP. D) consumption spending depends negatively on real GDP.
The above figure is referred to as a(n)
A) trade-off curve. B) opportunity curve. C) production possibilities curve. D) scarcity-shortage curve.
The equilibrium level of real GDP is $5,000 billion, the full employment level of real GDP is $6,000 . and the marginal propensity to consume (MPC) is 0.90 . Which of the following statements is true?
a. A recessionary gap exists equal to $100 billion. b. The full employment target could be reached if government increased its spending by $100 billion. c. Both of the above statements are true. d. Neither of the above statements are true.