When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. inventories to increase.
B. inventories to decrease.
C. there will be no change in inventories.
D. the government will spend more than it has collected in taxes.
B. inventories to decrease.
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What is meant by the term economic growth?
What will be an ideal response?
Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by
a. less than $0.50. b. $0.50. c. between $0.50 and $1. d. $1.
GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is
a. saving per person. b. GDP per person. c. government expenditures per person. d. investment per business firm.
The average benefit of n units of an activity is the:
A. total benefit of n units divided by n. B. extra benefit from carrying out one additional unit of the activity. C. n times the total benefit of n units. D. n divided by the total benefit of n units.