If real GDP grows at 3 percent a year, the quantity of money grows at 5 percent a year, and the velocity of circulation is constant, then the price level must be
A) increasing at 8 percent a year.
B) decreasing at 2 percent a year.
C) increasing at 15 percent a year.
D) increasing at 2 percent a year.
E) decreasing at 8 percent a year.
D
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Any action, other than lowering its price, that a firm undertakes to increase the demand for its output is called
a. limit pricing b. price enhancement c. illicit competition d. nonprice competition e. price intensive competition
Assume an economy with an upward-sloping aggregate supply curve and an MPC of .80 . An increase in investment spending of $50 billion will most likely increase total income by
a. $200 billion. b. $40 billion. c. more than $200 billion. d. more than $50 billion but less than $250 billion.
In the long run, a monopolistically competitive firm acting according to the Chamberlin model
A. will operate at the minimum point of the marginal cost curve. B. will earn positive economic profits. C. will operate at the minimum point of the average cost curve. D. will not operate at the minimum point of the average cost curve.
A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.
a. true b. false