The traditional Keynesian approach concludes that an increase in government spending
A) generates a greater increase in investment spending.
B) generates a greater increase in total spending because consumption spending increases as incomes increase.
C) has no effect on total spending because consumers increase saving by an equal amount.
D) generates an equal increase in total spending because government spending makes up part of total spending.
B
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A mandatory tax that both workers and employers in the United States pay to fund Social Security and Medicare is the
A) corporate income tax. B) individual income tax. C) payroll tax. D) excise tax.
Percentage markups are characteristically lower in supermarkets than in convenience stores because
A) convenience stores must charge high markups to compensate for low volume. B) marginal revenue is greater in supermarkets than in convenience stores. C) supermarkets are able to operate with a lower percentage return on investment. D) supermarkets can take advantage of quantity discounts. E) the demand curves of customers patronizing supermarkets tend to be more elastic.
If in the long run a firm makes zero profit, it should exit the industry
Indicate whether the statement is true or false
As the price of a good rises, the consumer will experience
A) a desire to consume a different bundle. B) a decrease in utility. C) a downward or leftward movement on the indifference map. D) All of the above.