Economists use the phrase ceteris paribus to express the assumption
A. "all else equal."
B. "scarcity is a fact of life."
C. "there is no such thing as a free lunch."
D. "everything affects everything else."
Answer: A
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The multiplier increases as the MPC increases
Indicate whether the statement is true or false
The figure above shows a production possibilities frontier. In the figure, when the economy moves from point E to point D, what is the opportunity cost of a DVD?
A) 0.25 cell phones B) 0.5 cell phones C) 1 cell phone D) 4 cell phones E) zero
Which of the following will be observed if the U.S. federal government reduces fiscal spending, keeping other things constant?
a. The aggregate demand curve will shift to the right. b. The aggregate expenditure in the economy will decrease. c. The economy will approach potential GDP. d. The marginal propensity to consume will increase. e. The average price level will increase.
If butter and margarine are substitute goods, an increase in the price of butter is most likely to:?