The economy of Appleland is experiencing a recession. In the figure given below, AD represents aggregate demand and AS represents aggregate supply in Appleland.
If Appleland decides to adopt austerity policies, it will
A. increase spending and cut taxes.
B. increase spending and taxes.
C. decrease spending and taxes.
D. decrease spending and increase taxes.
Answer: D
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Differentiate between principal and time value of money. John invests $100 in a bank for a year. At the end of the year he receives $125. What is the principal and time value of money in this case?
What will be an ideal response?
Anything that causes the United States to buy fewer foreign goods shifts the foreign currency __________ curve to the __________
A) demand; right B) demand; left C) supply; right D) supply; left
U.S. automobile manufacturers chose not to switch to producing subcompact cars for which of the following reasons?
(a) They did not perceive the U.S. demand for subcompacts as permanent. (b) This switch was not economically feasible in the long run. (c) Government policy prevented them from doing so. (d) All of the above.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then maximum profit
A) equals $336. B) equals $882. C) equals $1,218. D) cannot be determined solely from the information provided.