If, in the aggregate, consumers spend 75 cents of every extra dollar received, then the
A. MPC is 0.75.
B. APC is 1.25.
C. APC is 0.75.
D. MPS is 0.75.
Answer: A
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Which of the following is least likely to contribute to the volatility of investment spending?
a. Expectations about business conditions b. Changes in government spending c. Changes in tax laws d. Changes in capacity utilization e. Interest rate fluctuations
Rational expectations theory implies that the:
A. aggregate demand curve is vertical. B. long-run aggregate supply curve is vertical. C. long-run aggregate supply curve is horizontal. D. long-run aggregate supply curve is quite flat.
A microeconomist would study all of the following issues EXCEPT
A) the impact of a change in consumer income on the sales of corn. B) the impact of a snowstorm on the sales of snow shovels. C) the most efficient means for General Motors to produce an automobile. D) the effect of a change in income taxes on the nation's rate of unemployment.
When firms become so large that they have to add additional layers of management and decision making becomes more cumbersome,
a. economies of scale are said to occur b. marginal cost begins to fall in the short run c. marginal cost begins to rise in the short run d. the long-run average total cost curve is flat e. the long-run average total cost curve slopes upward