The ________ the expenditures multiplier effect, the ________ the change needed in government spending to bring about a given amount of increase in real GDP.
A. smaller; smaller
B. smaller; larger
C. larger; faster
D. larger; larger
Answer: B
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If the wage rate rises, then in the long run, the firm will replace some of its labor with other factors such as capital, even if it keeps its output level constant. This phenomenon is known as
a. the substitution effect. b. the scale effect. c. the regressive-factor effect. d. the factor-price effect.
How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?
A) the supply curve for clothing at retail department stores shifts to the left. B) the demand curve for clothing at retail department stores shifts to the right. C) the supply curve for clothing at retail department stores shifts to the right. D) the demand curve for clothing at retail department stores shifts to the left.
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves is vertical?
A) SRAS B) AD C) LRAS D) None of the above
What does the process of specialization do for an economy?
a. It makes it more efficient. b. It eliminates unemployment. c. It fosters competition. d. It makes it easier to control.