Technological change, such as the information technology revolution of the 1990s can shift the aggregate supply curve outward. If, at the same time, the government is decreasing spending, the most likely outcome of these two factors is a(n)
a. increase in the price level.
b. decrease in the price level.
c. increase in real GDP.
d. decrease in real GDP.
b
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The concept of "non-price rationing" means that, in general, we can deal with scarcity just as well without prices as with prices.
Answer the following statement true (T) or false (F)
Which of the following items most likely explains why corn is not produced by a cartel?
a. barriers to market entrance b. patent protection c. many producers d. income inelastic demand e. limited raw materials
The payoff matrix is associated with
a. cartel pricing b. game theory c. the behavior of a godfather firm in oligopoly d. long-run equilibrium in monopolistic competition e. price discrimination
Most mainstream macroeconomists oppose a strict requirement to balance the federal budget annually because they conclude that such a requirement would:
A. increase real interest rates and drive out investment spending. B. eliminate monetary policy as a stabilization tool. C. force government to undertake expansionary fiscal policy during inflation and contractionary fiscal policy during recession. D. expand the size of the federal government.