In Figure 4-6 above, with IS0 shifting to IS1 against the upward-sloping LM curve, at point 1
A) there is an excess demand for money.
B) there is an excess supply of money.
C) the demand for output exceeds Y1.
D) the demand for output is below Y1.
A
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If real disposable income is $300 billion and real consumer expenditures are $250 billion, it can be assumed that
A. the government is spending the difference. B. the difference is being invested. C. households are saving the difference. D. transfer payments make up the difference.
Refer to Figure 4.1. A shift from S1 to S2 will result from all of the following except
A) a decrease in the government's budget deficit. B) a decrease in net exports. C) a decrease in corporate taxes. D) a decrease in the desire of households to consume today.
If the market price is $2.75 and a perfectly competitive firm is producing 1,100 units and the marginal cost to produce the 1,100th unit is $2.75, which of the following is true?
A) The firm is not maximizing profit. B) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is zero. C) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is positive. D) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is negative.
A decrease in the general price level is associated with an upward shift in the aggregate expenditures function
a. True b. False Indicate whether the statement is true or false