If the price level changes from PL2 to PL1, what happens to the quantity of real GDP demanded?
a. It decreases from RGDP2 to RGDP1.
b. It increases from RGDP1 to RGDP2.
c. It decreases from RGDP1 to RGDP2.
d. It increases from RGDP2 to RGDP1.
d. It increases from RGDP2 to RGDP1.
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Which of the following statements is false?
a. Economists look at the factors that lead an individual to decide that a particular idea is in his or her best interest. b. Economists do not ask whether a particular decision is in the individual's best interest. c. Choices must be made because of scarcity. d. A particular choice is made by an individual because that choice provides the greatest satisfaction. e. None of these statements is false, they are all true.
In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Autonomous expenditure equals:
A. 290 + 0.75Y. B. 290. C. 320. D. 320 + 0.25Y.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
Select the normative statement that completes the following sentence: If the minimum wage is raised:
A. cost per unit of output will rise. B. workers will gain their rightful share of total income. C. the rate of inflation will increase. D. profits will fall.