Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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XYZ Gadget Company is currently considering which investment projects it should undertake. The following list of projects along with the estimated rate of return of each project is presented to the executive management team:Project A (8.5%)Project B (7%)Project C (6%)Project D (11%)Project E (5.5%)The current interest rate in the loanable funds market is 5%. However, if an increase in government borrowing pushes the interest rate to 7.5%, we would expect the company to discontinue investment plans for all but ________ of its planned projects.
A. two B. three C. four D. one
The key to reaching a Pareto optimum through mutually beneficial exchange _____
a. is to remove barriers to international trade b. is to establish property rights for valuable resources c. is to provide start-up capital to fledgling entrepreneurs d. is to encourage people to use online auction services
An increase in the price of oil causes
a. a decrease in the demand for substitute goods. b. an increase in the price of substitute goods. c. an increase in the demand for complementary goods. d. an increase in the price of complementary goods.
Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:
a. joint ventures. b. sole proprietorship firms. c. partnership firms. d. multinational firms. e. co-operative firms.