Graphically, the market demand curve is:
A. greater than the sum of the individual demand curves.
B. the vertical sum of individual demand curves.
C. steeper than any individual demand curve that is part of it.
D. the horizontal sum of individual demand curves.
Answer: D
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According to the rational expectations approach , if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output, then people will not be able to anticipate the effects of this policy on the price level, unemployment, and the real output level
a. True b. False Indicate whether the statement is true or false
If the size of a tax increases, tax revenue
a. increases. b. decreases. c. remains the same. d. may increase, decrease, or remain the same.
Which of the following is an example of an investment in physical capital?
A. A firm purchases new equipment for a manufacturing process. B. A firm pays for workers to take college classes. C. A firm trains workers to operate new machinery. D. A chemical firm employs chemists to develop new chemicals.
Daisy is consuming X and Y so that she is spending her entire income and MUx/Px = 12 and MUy/Py = 10. To maximize utility, she should
A. consume more X and less Y. B. consume less of both X and Y. C. consume less X and more Y. D. continue to consume the same amount of X and Y since she is already maximizing utility.