Based on the graph above, suppose the economy is at point 2, then output falls to 10 and there is a price shock of one percent. The inflation rate next period will be ________ percent
A) 5
B) 3.5
C) 4.5
D) 4
E) none of the above
C
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Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. If Larry were to decrease the production of lassos, which of the following is true regarding the company's costs?
A. The variable costs of rope would drop to zero. B. The fixed cost of the rope cutting machine would stay the same. C. The fixed cost of the employee's wages would stay the same. D. None of these is true.
A possible explanation for the persistence of the U.S. federal budget deficits is that: a. it is easier politically to increase government spending than to decrease taxes. b. it is easier politically to decrease government spending than to decrease taxes. c. it is easier politically to increase government spending than to increase taxes. d. the economy naturally tends toward recessions
e. the economy naturally tends toward full employment.
An individual bank can lend out at most its
What will be an ideal response?
Businesses in the United States cut their investment projects by $30 billion. If the MPC is 2, what will be the impact on the national income (Y)?
A. Y will fall by $15 billion. B. Y will fall by $30 billion. C. Y will fall by $60 billion. D. Y will fall by $120 billion.