Refer to the scenario above. Suppose Edwin consumes the total output produced. What is likely to happen in this case?
A) GDP will remain unchanged. B) GDP will decrease.
C) Trade surplus will increase by $200. D) GDP will increase.
A
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What is the opportunity cost of economic growth?
A) current period consumption goods B) land C) current period capital goods D) both current period consumption and capital goods E) both current period capital goods and land
If when the money supply changes, real output and velocity do not change, then a 2 percent increase in the money supply
a. decreases the price level by 2 percent. b. decreases the price level by less than 2 percent. c. increases the price level by less than 2 percent. d. increases the price level by 2 percent.
According to rational expectations theory,
A) every day is a new day and yesterday's occurrences have no bearing on today's decisions. B) when making decisions a person will consider only information based on past experience. C) even though a person considers information related to future events as potentially important for decision making, he realizes that such information is unreliable and worthless. D) past experience is a good guide for decision making, but so is information related to possible future outcomes.
The first unit of an information product is produced at a high fixed cost. Producing additional units entails relatively
A. low external cost. B. high social cost. C. high average variable cost. D. low marginal cost.