If average income increases, ceteris paribus, then there will be:
a. A movement along and a shift in the demand curve
b. A shift of the demand curve.
c. No effect on the demand curve, because income is not a ceteris paribus condition
d. A movement along the demand curve
Ans: b. A shift of the demand curve.
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Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion. What is the rate of growth of real GDP between 2015 and 2016?
A) -10% B) -5% C) -2% D) -1%
A competitive equilibrium fails to be a Pareto Optimum with a distorting tax because
A) the consumer's budget constraint has an additional kink. B) the firm is no longer maximizing profits. C) the government wastes its revenue. D) the consumer faces a different effective wage than the firm.
In the simple Keynesian aggregate expenditure model, the equilibrium level of disposable income is achieved when:
a. the employment rate is equal to the labor force participation rate. b. saving equals investment c. aggregate expenditures exceed output. d. aggregate expenditures are equal to real disposable income.
Use the following general linear demand relation:Qd = 680 - 9P + 0.006M - 4PRwhere M is income and PR is the price of a related good, R. If M = $15,000 and PR = $20 and the supply function is Qs = 30 + 3P , then, when the price of the good is $60,
A. there is equilibrium in the market. B. there is a shortage of 60 units of the good. C. there is a surplus of 60 units of the good. D. the quantities demanded and supplied are indeterminate.