The expenditure schedule will shift upward when
A. investment falls.
B. the price level rises.
C. net exports decrease.
D. autonomous consumption increases.
Answer: D
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The higher the required reserve ratio, _____
a. the larger the money multiplier b. the smaller the money multiplier c. the more the excess reserves after each round of the money-creation process d. the more the money that can be lent in each round of the money-creation process e. the lower the demand for cash by the non-banking public
A monopolistically competitive firm is operating at a short-run level of output where price is $30, average total cost is $35, average variable cost is $25, marginal cost is $15, and marginal revenue is $12. In the short run this firm should:
A. decrease the level of output. B. shut down. C. make no change in the level of output. D. increase the level of output.
Which of the following statements is correct with respect to price elasticity of supply?
A. The price elasticity of supply tends to be greater as new firms can easily enter the market. B. The price elasticity of supply tends to be greater as expanding existing production facilities is less costly. C. The price elasticity of supply tends to be smaller as firms have limited production facilities. D. All of these are correct.
Expansionary fiscal policy
A) can be effective in the short run. B) causes complete crowding out in the short run. C) is never effective because of crowding out. D) can be effective in the long run.