In the linear breakeven model, the breakeven sales volume (in dollars) is equal to fixed costs divided by:
a. unit selling price less unit variable cost
b. contribution margin per unit
c. one minus the variable cost ratio
d. a and b only
e. a, b, and c
c
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Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and net nonreserve international borrowing/lending balancein the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete
equilibrium. a. The GDP Price Index remains the same and net nonreserve international borrowing/lending balance becomes more negative (or less positive). b. The GDP Price Index rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The GDP Price Index falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. The GDP Price Index and net nonreserve international borrowing/lending balanceremain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Improvements in the level of technology will generally shift the production function downward.
Answer the following statement true (T) or false (F)
Suppose C = 1000 + .9Y, G = 400, I = 100, (X – IM) = 0, and there are no income taxes. If investment falls by 50, equilibrium GDP will
a) fall by 50 b) fall by 5 c) fall by 500 d) fall by 45 e) fall by half its previous value
If you were told the MPC was = 0.75 and the government engaged in a tax decrease of $400B, then the initial change in GDP would be:
A. $300B. B. $400B. C. $1600B. D. $1200B