In the Keynesian model, the difference between no intervention by the government during a recession and intervention using expansionary monetary or fiscal policy is that no intervention will return the economy to its equilibrium level of output
A) faster than intervention will and at a lower price level.
B) slower than intervention will and at a higher price level.
C) slower than intervention will and at a lower price level.
D) faster than intervention will and at a higher price level.
C
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Firms that face capacity constraints can increase output only up to the capacity, but no further. Therefore, firms
a. Should price to capacity as long as MR > MC b. Should price to capacity as long as MR = MC c. Should price to capacity as long as MR < MC d. Should not take capacity into consideration in pricing decisions
If the MPC = 0.8, an increase in investment spending from $35 billion to $38 billion will increase real GDP by
A) $3 billion. B) $3.75 billion. C) $15 billion. D) $24 billion.
In 1989 the United States passed a law against catching shrimp with nets that do not have turtle excluder devices. Four Asian countries filed a complaint with the Word Trade Organization (WTO), and it ruled that the U.S. policy violated WTO rules because
A. one nation could not impose moral values on other nations as per WTO rules. B. the policy did not apply equally to all exporting nations and did not recognize alternative ways to protect sea turtles. C. protection of sea turtles was not a legitimate environmental purpose. D. sea turtles were not on the endangered species list.
Suppose that a product benefits from a successful advertising campaign. The result is that:
A. the demand for the product increases. B. the demand for the product decreases. C. the supply of the product increases. D. the supply of the product decreases.