The inflation rate reported in the news is usually calculated from the GDP deflator rather than the consumer price index
a. True
b. False
Indicate whether the statement is true or false
False
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In the long run, a perfectly competitive firm makes
A) a positive economic profit. B) zero economic profit. C) negative economic profit, that is, an economic loss. D) zero accounting profit. E) either a positive economic profit or a normal profit.
President Reagan believed that the tax cuts of 1981 would stimulate the economy because the
a. marginal tax rates were too high, causing production costs to be too high, curbing production b. marginal tax rates were too high, causing production to be curbed by lack of demand c. marginal tax rates were too high, creating a disincentive effect on production d. marginal tax rates were too low, causing government revenues to fall, creating deficit spending and crowding out e. marginal tax rates were too low, causing government revenues to rise, creating surpluses that curbed overall production
Identify the three components of aggregate expenditure aside from consumption, and briefly identify factors that influence them.
What will be an ideal response?
Refer to the information provided in Figure 10.3 below to answer the question(s) that follow. 
Figure 10.3 Refer to Figure 10.3. The market wage is initially W1 and the firm is initially at Point B. Labor supply increases from S1 to S0. The firm?s MRPL curve will shift from MRPL at K2 to MRPL at K1 because
A. the firm is no longer maximizing profits. B. the factor substitution effect will cause the firm to substitute capital for the lower-priced labor. C. the output effect led to ann increase in the demand for capital, which in turn increased the productivity of labor. D. the supply of labor increased and therefore the productivity of labor increased.