Private disposable income equals GDP ________
A) minus corporate profits and net factor income
B) plus transfer payments and net exports
C) plus depreciation, transfer payments, and interest payments on government debt
D) plus net factor income minus net government income
E) none of the above
D
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How does aggregate demand curve (AD) differ from an individual demand curve (D)?
A) AD is generally vertical while D is usually downward sloping. B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system. C) AD is generally a downward sloping curve while D usually slopes upward. D) Look for D in macroeconomic analyses and for AD in microeconomics.
The above figure shows the demand and supply curves for housing. What would be the effects of a rent ceiling equal to $500 per month?
A) a surplus equal to 3,000 apartments B) a shortage equal to 3,000 apartments C) a shortage equal to 250 apartments D) nothing because the rent ceiling has no effect on the equilibrium price and quantity
In the short run a perfectly competitive firm will
A) never shut down. B) shut down if P < ATC. C) shut down if P < AVC. D) shut down if P > AFC.
If the Fed's goal is to hold income constant, an expansionary fiscal policy must be accompanied by ________ monetary policy, and the Fed must allow the interest rate to ________ significantly
A) an expansionary, rise B) an expansionary, fall C) a contractionary, rise D) a contractionary, fall