According to Keynes, which of the following will cause a change in the consumption component of aggregate demand?
a. Change in foreign demand
b. Change in government spending
c. Change in desire to save more or less
d. Change in relative price increase of U.S. goods
c. Change in desire to save more or less
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
________ is(are) department(s) of U.S. banks that are permitted to engage in Eurocurrency banking
A) Eurobanks B) The Paris Club C) International Banking Facilities D) Both A and C
Which of the following describes a positive externality?
A) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale. B) People who do not attend college still benefit from others who receive a college education. C) The government imposes a tax on cigarettes in order to discourage smoking among teenagers. D) Mary volunteers to drive her neighbor's children to soccer practice.
In the above figure, if price is equal to P4, the firm will
A. incur an economic loss. B. earn positive economic profits. C. shut down. D. earn zero economic profits.