“Equilibrium” is a situation in which there are no inherent forces to produce change.
Answer the following statement true (T) or false (F)
True
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You are given the following information on the macroeconomy (in millions dollars):
Consumption: 250 + 0.50Y Investment: 100 + 0.10Y Government Spending 400 Exports 50 Imports 50 + 0.25Y Compute the equilibrium level of income, the size of the multiplier, and the change in equilibrium income for a decrease in autonomous investment of $75 million.
Everything else held constant, in the market for reserves, when the supply for federal funds intersects the reserve demand curve on the downward sloping section, decreasing the interest rate paid on excess reserves
A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q1 + q2, and both firms have a constant marginal cost of 10
If firm 1 is a Stackelberg leader and firm 2's best response function is q2 = (100 – q1)/2, at the Nash-Stackelberg equilibrium firm 1's output is A) 30. B) 40. C) 60. D) 70.
Appropriate fiscal policy depends on the other major tool of governmental stabilization policy:
a. trade policy. b. tax policy. c. monetary policy. d. labor market policy.