Let the consumption function be represented by the following equation: C = c0 + c1YD. For this equation, we assume that c1 is
A) negative.
B) larger than c0.
C) different at different levels of income.
D) equal to one.
E) none of the above
E
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Graphically the intersection of the aggregate demand curve and the short-run aggregate supply line determines:
A. short-run equilibrium. B. long-run equilibrium. C. potential output. D. exogenous spending.
The 1987 study by Bowen, Leamer and Sveikauskas
A) supported the validity of the Leontief Paradox. B) supported the validity of the Heckscher-Ohlin model. C) used a two-country and two-product framework. D) demonstrated that in fact countries tend to use different technologies. E) proved that the U.S.'s comparative advantage relied on skilled labor.
The law of diminishing returns causes a firm's short-run marginal cost curve to be s-shaped
a. True b. False Indicate whether the statement is true or false
Money that is acceptable because the government requires that it be accepted in payment of debt is _____
a. legal tender b. commodity money c. bad money d. backed by government's wealth e. hoarded by the people