If the government decreases the income tax rate, then:
A. aggregate supply curve with shift to the right.
B. aggregate demand will shift left.
C. aggregate demand will shift right.
D. GDP will decrease.
Answer: C
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If a nation is currently operating at a point inside its production possibilities curve, it
A. is fully employing all of its resources. B. is operating beyond its possible capacity. C. is utilizing its resources efficiently. D. none of the choices are true.
The ratio of the change in consumption to the change in disposable income is the
A) average propensity to save. B) marginal propensity to consume. C) average propensity to consume. D) marginal propensity to save.
Assume that for a particular firm's output price = $80, marginal cost = $30, average total cost = $25. This information suggests that the firm in question has:
A) no market power. B) very little market power. C) a fair degree of market power. D) absolute market power.
Refer to the above figure. Excess quantity demanded will exist when
A) the price is between $0 and $6. B) the price equals $6. C) the price equals $10. D) quantity demanded equals 3.