Which of the following shows a decrease in income in this graph?
a. Area f is larger than area e.
b. Area f is larger than area d.
c. Area d is larger than area f.
d. Area d is larger than area e.
c. Area d is larger than area f.
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Refer to the above figure. Suppose the U.S. economy is currently operating at point C. Which of the following actions would you recommend to the president of the United States?
A) Engage in contractionary fiscal policy by reducing government spending. B) Reduce taxes to stimulate investment, consumption and net exports. C) Increase government spending while holding taxes constant. D) Reduce the interest rate to stimulate investment minimizing the crowding out effect.
The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?
A) Real GDP fluctuates around potential GDP. B) Real GDP is always equal to potential GDP. C) Real GDP cannot be greater than potential GDP. D) Real GDP cannot be less than potential GDP. E) Real GDP cannot be equal to potential GDP.
If average variable cost exceeds marginal cost, then: a. average variable cost is increasing and the average total cost is decreasing
b. the average variable cost is decreasing and the average total cost is increasing. c. both the average variable and average total cost are decreasing. d. the average variable cost is decreasing and the average total cost may be increasing or decreasing.
One of the key factors in the economic success of South Korea was
a. an increase in years of schooling. b. a reduction in the amount of imports. c. the creation of new technology. d. all of the above.