When the goods of competing companies are identical, consumers have no reason to prefer one product over the other, so the demand curve for each manufacturer will be perfectly elastic.
Answer the following statement true (T) or false (F)
True
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Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, by how much should they decrease taxes?
A) $300 B) $750 C) $1,000 D) $3,000
The above figure shows the production possibility frontier for a country. What is the opportunity cost to move from point D to point E?
A) 6 thousand bottles of wine B) 15 thousand bottles of wine C) 6 tons of rice D) 9 thousand bottles of wine E) Nothing, it is a free lunch.
Ceteris Paribus, if current output has fallen below potential ________
A) a positive inflation gap will ensue B) it is likely that the equilibrium real rate has fallen below the policy rate C) a negative unemployment gap will ensue D) it is likely that the equilibrium real rate has risen above the policy rate E) none of the above
During the Federal Bank Holiday ordered by President Roosevelt
a. new supplies of gold were distributed to the banks. b. a national monetary commission was set up. c. the banks were inspected. d. the leadership of the Federal Reserve System was replaced.