If real GDP increased and nominal GDP decreased during the same year, we could conclude that
a. the general price level increased during the year.
b. the unemployment rate increased during the year.
c. the general price level fell during the year.
d. net exports were negative.
c. the general price level fell during the year.
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Writing in the New York Times on the technology boom of the late 1990s, Michael Lewis argues, "The sad truth, for investors, seems to be that most of the benefits of new technologies are passed right through to consumers free of charge"
What does Lewis means by the benefits of new technology being "passed right through to consumers free of charge"? A) In the long run, price equals the lowest possible average cost of production. In this sense, consumers receive the new technology "free of charge." B) Firms in perfect competition are price takers. Since they cannot influence price, they cannot dictate who benefits from new technologies, even if the benefits of new technology are being "passed right through to consumers free of charge." C) In perfect competition, price equals marginal cost of production. In this sense, consumers receive the new technology "free of charge." D) In perfect competition, consumers place a value on the good equal to its marginal cost of production and since they are willing to pay the marginal valuation of the good, they are essentially receiving the new technology "free of charge."
Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what will the new equilibrium level of GDP be if government spending increases to 2,500?
C = 5,000 + (MPC)Y I = 1,500 G = 2,000 NX = -500 A) $32,500 B) $34,000 C) $38,000 D) $42,000
A subsidy to buyers has been placed in the market in the graph shown. Why might the government enact such a policy?
A. As a way to encourage the consumption of the good
B. As a way to encourage consumers to substitute away from the good
C. As a way to discourage the production of the good
D. As a way to discourage the consumption of the good
Total expenditures on a company's product will be largest when it is priced such that the elasticity of demand:
A. equals -1. B. is greater than -1. C. is less than -1. D. equals 0.