Firms want to capture consumer surplus
Indicate whether the statement is true or false
True
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The difference between the sale value of the product and the value of the inputs that went into it is called the:
A. value-added of that stage of production. B. value of the final product. C. profit margin. D. mark up.
If MPC = 0.8, a $200 billion increase in government purchases would have what size effect on the "first round" of induced added consumption, and what total effect on AD?
a. increase "first round" consumption by $80 billion; increase AD by $400 billion b. increase "first round" consumption by $160 billion; increase AD by $1 trillion c. increase "first round" consumption by $200 billion; increase AD by $1 trillion d. increase "first round" consumption by $800 billion; increase AD by $4 trillion
How are the following items treated in the calculation of M1?
A. Checkable deposits and currency are both included. B. Small time deposits and money market mutual funds of individuals are both included. C. Small time deposits and currency are both included. D. Checkable deposits are excluded and currency is included.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A