Refer to the above figure. The figure represents the saving function for the consumer. Point B represents
A) the amount of autonomous consumption. B) the point at which saving equals zero.
C) a situation in which saving is negative. D) a situation in which saving is positive.
B
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Which of the following transactions would count in GDP?
a. Kerry buys a new sweater to wear this winter. b. Patricia receives a Social Security check. c. Roberto gives his daughter $50 for her birthday. d. Latika sells $1,000 of Google stock. e. Karen buys a new car. f. Amy buys a used car.
An inflationary gap exists when the macro economy is in equilibrium at more than the potential output of the economy because aggregate demand is so high that the economy is operating temporarily beyond its long-run capacity.In other words, the AD=AS occurs to the right of the vertical long-run supply curve.
Indicate whether the statement is true or false.
Consider the following entry game: Here, firm B is an existing firm in the market, and firm A is a potential entrant. Firm A must decide whether to enter the market (play "enter") or stay out of the market (play "not enter"). If firm A decides to enter the market, firm B must decide whether to engage in a price war (play "hard"), or not (play "soft"). By playing "hard," firm B ensures that firm A makes a loss of $1 million, but firm B only makes $1 million in profits. On the other hand, if firm B plays "soft," the new entrant takes half of the market, and each firm earns profits of $5 million. If firm A stays out, it earns zero while firm B earns $10 million. Which of the following are perfect equilibrium strategies?
A. (not enter, soft) B. (not enter, hard) C. (enter, hard) D. (enter, soft)
The improved health of a nation can increase:
A. the productivity of workers and economic development. B. economic growth and malnutrition among children. C. economic development and illiteracy. D. productivity of workers and fiscal policy spending.