The principle of voluntary exchange is based on the idea of:
A. making assumptions.
B. isolating variables.
C. thinking at the margin.
D. rational self-interest.
Answer: D
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As the marginal propensity to consume ________, the value of the multiplier increases
A) decreases slightly B) is constant C) increases D) decreases
A decrease in aggregate demand causes a decrease in ________ only in the short run, but causes a decrease in ________ in both the short run and the long run
A) the price level; real GDP B) the price level; the price level C) real GDP; real GDP D) real GDP; the price level
Typically, the economy recovers fairly quickly from a recession. Why did this NOT happen in the United States during the Great Depression?
What will be an ideal response?
Draw a graph showing a short-run average variable cost curve, a short-run average total cost curve, and a short-run marginal cost curve. Briefly explain the shape of each curve and how they relate to each other.
What will be an ideal response?