Monetary policy affects which of the following variables in the long run?
A) the level of output
B) the rate of unemployment
C) the rate of inflation
D) the real interest rate
E) all of the above
C
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If spending increased by $200, and the GDP increased $1,000 as a result, the MPC must be:
A. 0.80 B. 0.75 C. 4 D. 5
A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following?
a. average revenue exceeds marginal revenue b. marginal revenue equals marginal cost c. price exceeds marginal cost d. All of the above are correct.
For an economy as a whole, income must equal expenditure because
a. the number of firms is equal to the number of households in an economy. b. individuals can only spend what they earn each period. c. every dollar of spending by some buyer is a dollar of income for some seller. d. every dollar of saving by some consumer is a dollar of spending by some other consumer.
The table below shows a competitive firm's short-run production function. Labor is the firm's only variable input, and market price for the firm's product is $2 per unit.
If market price for the firm's product increases to $5, how many units of labor will the firm employ at a wage rate of $200?
A. 0, the firm shuts down B. 4 C. 5 D. 6 E. 7