Answer the following questions true (T) or false (F)
1. YFE represents the level of potential GDP in the economy.
2. Real GDP is equal to nominal GDP adjusted for productivity.
3. The marginal propensity to consume is equal to the percent change in consumption with respect to a change in income.
1. FALSE
2. FALSE
3. TRUE
You might also like to view...
An important reason why economies at an early stage of development tend to operate inefficiently is
A) they tend to be dominated by the agricultural sector, where productivity is usually low. B) they tend to have authoritarian governments that stifle innovation. C) they tend to be plagued by superstitious beliefs that stifle innovation. D) the high transactions costs associated with barter.
Research shows that prices tend to remain sticky for a longer period of time
A) in the manufacturing sector than in the service sector. B) in the service sector than in the manufacturing sector. C) in Western Europe than in the United States. D) in the United States than in Western Europe.
Suppose an entrepreneur commits to a production schedule but overestimates the market price for her products. Which situation is not possible?
a. Price equals average total cost. b. Losses are greater than if she shut down. c. Total profit is positive. d. Average variable cost is greater than marginal cost. e. Total profit is zero.
When economists say the supply of a product has decreased, they mean that
a. the supply curve has shifted to the left. b. the product price has decreased, and as a consequence, suppliers are producing less of the product. c. producers are now willing to sell more of this product at each possible price. d. the supply curve has shifted to the right.