If you buy a burger and fries at your favorite fast food restaurant,
a. then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant.
b. then GDP will be higher, but consumption spending will be unchanged.
c. then GDP will be unchanged, but consumption spending will be higher.
d. then both GDP and consumption spending will be higher.
d
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In a market system, what must take place for quantity demanded to continually be equated with quantity supplied?
A) Price controls must be applied by governments. B) Relative prices must be able to adjust to market clearing levels. C) Tastes and preferences of consumers must adjust to eliminate surpluses or shortages. D) Businesses must engage in involuntary, unprofitable exchanges to eliminate surpluses or shortages.
Most of Europe has relatively ________ inequality, and much of Latin America and southern Africa has relatively ________ inequality.
A. high; high B. low; high C. low; low D. high; low
If the Fed thought the economy was experiencing a recessionary gap, and it wanted to correct this gap, it would
A. raise the reserve requirement. B. sell bonds. C. lower the differential between the discount rate and the federal funds rate. D. increase aggregate supply.
Refer to the above figure. Suppose this industry was perfectly competitive and then merged into one monopolistic firm. The monopoly would
A. reduce output from Q3 to Q1. B. raise price from P1 to P4. C. raise price from P1 to P2. D. reduce output from Q2 to Q1 and raise price from P3 to P4.