In a binding situation,an increase in government spending
A. shifts the AD curve to the left.
B. shifts the AD curve to the right.
C. causes the AD curve to become horizontal.
D. does not shift the AD curve.
Answer: B
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Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%. Suppose the current unemployment rate is 8%
What would be the current level of output according to Okun's law (when the Okun's law coefficient is 2)? A) $4500 billion B) $4700 billion C) $4900 billion D) $5000 billion
Motivations for behavioral economics include:
A. people sometimes make choices that are inconsistent with standard economic theory. B. all choices made by individuals are consistent with standard economic theory. C. standard economic theory can lead to unreasonable conclusions about consumer welfare. D. people sometimes make choices that are inconsistent with standard economic theory and standard economic theory can lead to unreasonable conclusions about consumer welfare.
A new computer will generate $1,000 in net revenue for a firm during its first year, $500 during its second year, $250 during its third year, and nothing thereafter. If the interest rate is 10 percent (0.10) per year, what is the present value of the computer to the firm? (The first payment will be received at the end of this year.)
a. $1,590.91 b. $1,510.14 c. $1,750.00 d. $1,446.28 e. $1,661.16
The income of an individual in Budopia depends on his ethnicity and several other factors which can be measured quantitatively. If there are 5 ethnic groups in Budopia, how many dummy variables should be included in the regression equation for income determination in Budopia?
A. 1 B. 5 C. 6 D. 4