What kind of externalities affects the levels of unemployment, inflation, or growth in the economy as a whole?
A. Macroeconomic
B. Positive
C. Negative
D. Microeconomic
Answer: A
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In the figure above, in the short-run macroeconomic equilibrium
A) there is no structural unemployment. B) real GDP is greater than potential GDP. C) real GDP equals potential GDP. D) real GDP is less than potential GDP.
For monetarists, the sole source of fluctuations in aggregate demand is ________
A) government spending and tax rates B) the velocity of money C) the supply of money D) international trade variables, i.e. exports and imports
The Keynesian perspective on the effect of an increase in taxes is that this policy action
A) generates reductions in consumption and in saving. B) generates reductions in consumption and an increase in saving to pay for the new taxes. C) has no impact on consumption. D) increases current consumption and reduces future consumption.
In order to maximize profits, a firm should produce at the output level for which:
a. average cost is minimized. b. marginal revenue equals marginal cost. c. marginal cost is minimized. d. price minus average cost is as large as possible.