For an economy starting at potential output, a decrease in one or more of the components of aggregate expenditure in the short run results in a(n):
A. recessionary output gap.
B. decrease in potential output.
C. expansionary output gap.
D. increase in potential output.
Answer: A
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In the above figure, what is the profit-maximizing price and output?
A) $9, 14 B) $13, 14 C) $11, 16 D) $10, 17
The more inelastic the demand for a product, the larger the share of the tax that will be paid by consumers
a. True b. False Indicate whether the statement is true or false
If pencils and paper are complements for most consumers, then if the price of paper increases, you would expect:
A. the equilibrium price of pencils to rise and the equilibrium quantity of pencils to fall. B. the equilibrium price and quantity of pencils to fall. C. the equilibrium price and quantity of pencils to rise. D. the equilibrium price of pencils to fall and the equilibrium quantity of pencils to rise.
A bank is a financial intermediary. Which of the following statements is most accurate?
A. The bank's depositors are the ultimate lenders and the bank is the ultimate borrower. B. The bank's depositors are the ultimate lenders, while those seeking loans from the bank are the ultimate spenders. C. Those seeking loans from the bank are the ultimate spenders; the bank's stockholders are the ultimate lenders. D. People seeking loans from the bank are the ultimate spenders while the bank is the ultimate lender.