If the marginal propensity to consumer is 0.8, the spending multiplier must be:
A. 5
B. 1.2
C. 1.8
D. 2
Answer: A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
When drawing a production possibilities frontier, which of the following is held constant?
A) the amount of money in the economy B) the available factors of production and the state of technology C) the prices of goods and services D) the quantity of the goods and services that are produced E) None of the above because nothing is held constant when drawing the production possibilities frontier.
What factors determine the size of the price elasticity of demand?
What will be an ideal response?
In the graph for the relationship between elasticity of the demand and total revenue, we can see that at five units, ______.
a. total revenue is rising and marginal revenue is profitable
b. total revenue is rising and marginal revenue is unprofitable
c. total revenue is maximized and marginal revenue is zero
d. total revenue is minimized and marginal revenue is equal to price