An example of an explicit cost of production is:
a. the cost of foregone labor earnings for an entrepreneur
b. the cost of flour for a baker.
c. the foregone rent that could have been earned if land owned by a firm was not used as its parking lot.
d. provided by none of the above.
b
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According to the Keynesian approach, an increase in taxes
A) will not impact consumption, as most consumption is autonomous. B) will reduce consumption by an amount less than the change in taxes. C) will increase consumption, as the government will spend the extra tax revenue and that increases consumption. D) will reduce consumption exactly by the amount of the taxes.
A firm that buys goods that it would normally produce internally from an international company is using
A) transfer pricing. B) insourcing. C) international outsourcing. D) domestic outsourcing.
If the government wished to shift aggregate demand to the right, it might:
A. increase government spending. B. increase income taxes. C. pressure the Fed to decrease the money supply. D. Any of these things might cause aggregate demand to shift to the right.
If the Fed conducted an open market sale of government bonds and raised the discount rate: a. the money supply would increase
b. the money supply would decrease. c. the money supply would not change. d. the money supply could either increase or decrease.