In the IS-LM model, a decrease in government purchases leads to a(n) ______ in planned expenditures, a(n) ______ in total income, a(n) ______ in money demand, and a(n) ______ in the equilibrium interest rate.
Fill in the blank(s) with the appropriate word(s).
decrease; decrease; decrease; decrease
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In a large open economy, an increase in ________ leads to ________
A) desired saving; an increase in the domestic interest rate B) desired investment; an decrease in the domestic interest rate C) desired saving; an increase in desired investment D) desired saving; a decrease in actual investment E) none of the above
When there is a binding price floor
A) there is no equilibrium. B) the quantity demanded does not equal the quantity supplied. C) all potential producers are happy because they can sell the good at a higher price. D) the government is helping consumers at the expense of producers.
The above figure shows the marginal benefit to a firm of polluting in the local river while producing its output, and the marginal cost to the surrounding neighbors. The marginal cost of production is zero for the firm
According to Coase's Theorem, which of the following scenarios is most likely to lead to the socially optimal level of pollution? A) The firm owns the river and there are a thousand surrounding neighbors. B) The firm owns the river and there is just one nearby neighbor. C) The river is jointly owned by one thousand surrounding neighbors. D) The firm owns the river, and therefore produces the social optimum no matter what.
Economic profit is defined as total revenue
a. plus total costs b. minus marginal costs c. minus variable costs d. minus total costs e. minus fixed costs