Explain what factors cause shifts and changes in the slope of the ZZ curve presented in chapter 3
What will be an ideal response?
The ZZ curve is upward sloping. The ZZ curve illustrates the level of demand at each level of income. As Y increases, households consume more causing an increase in demand. So, as Y rises, so does demand. The marginal propensity to consume will determine the size of the slope. The ZZ curve will shift when any autonomous component of demand changes. This will include changes in T, G, I and c0.
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Answer the following statement(s) true (T) or false (F)
1. A firm earns a positive economic profit when the market price exceeds its marginal cost. 2. As long as profits remain positive, a firm will want to increase the quantity produced. 3. Only variable costs are relevant to a firm's decision to shut down. 4. When a firm has chosen to shutdown it has exited the industry. 5. A competitive firm will exit the industry in the long run if the price of its product falls below its average cost.
Which of the following is not included in the M1 category?
a. Currency b. Checkable deposits c. Traveler's checks d. Savings deposits
If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen to interest rates?
Suppose that ten years ago the dollar would buy 162 Japanese yen, but now the dollar will buy only 123 yen. Relative to the yen, over the past ten years the value of the dollar ________.
A. increased by about 24% B. increased by about 32% C. decreased by about 24% D. decreased by about 32%