In the Keynesian cross diagram, an increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to
________, everything else held constant. A) up; rise
B) up; fall
C) down; rise
D) down; fall
A
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If consumption is $1,230 when disposable income is $1,420, and consumption is $1,400 when disposable income is $1,620, then the marginal propensity to consume (MPC) is
A) 1.15. B) 0.15. C) 6.67. D) 0.85.
If you purchase a share of stock from your friend who initially purchased the stock three years ago, your purchase of the stock represents a transaction in the secondary financial market
Indicate whether the statement is true or false
File-sharing programs such as Napster, Kazaa, and iMesh make it possible for individuals to exchange music files over the Internet
All else constant, which of the following statements best describes how the development of these programs has affected the retail market for new music CDs? A) Demand for CDs has decreased, causing equilibrium price and quantity to decrease. B) Demand for CDs has increased, causing equilibrium price and quantity to increase. C) Demand for CDs has decreased, causing equilibrium price to decrease and equilibrium quantity to increase. D) Demand for CDs has increased, causing equilibrium price to increase and equilibrium quantity to decrease.
Using the textbook's production function, if two percent more labor working with two percent more capital produces two percent more real GDP, then "multifactor productivity" has
A) risen by four percent. B) risen by two percent. C) remained unchanged. D) fallen by one percent. E) fallen by two percent.