Aggregate supply is
A. the stock of all goods in the economy.
B. the sum of all planned production in the economy.
C. the summation of all product supply curves.
D. the horizontal summation of all supply curves for services.
Answer: B
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Suppose capital and labor are perfect substitutes resulting in a production function of q = K + L. That is, the isoquants are straight lines with a slope of -1
Derive the long-run total cost function TC = C(q) when the wage rate is w and the rental rate on capital is r.
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
According to the graph shown, the change to government revenue brought about by the introduction of a tariff to an economy once operating under free trade is:
A. an increase of area JK. B. an increase of area FGJK. C. a decrease of area IL. D. an increase of area IJKL.
According to the convergence hypothesis, as a country grows wealthier, its productivity growth rate will slow down.
Answer the following statement true (T) or false (F)
Without a change in discretionary fiscal policy, we would expect that if the economy goes into recession, then the:
A. Cyclically-adjusted deficit and the actual deficit would both increase B. Cyclically-adjusted deficit and the actual deficit would both decrease C. Cyclically-adjusted deficit would stay the same while the actual deficit would increase D. Cyclically-adjusted deficit would increase while the actual deficit would stay the same