If the government decides to change the level of government spending, what happens to the value of the multiplier?
a. It becomes larger.
b. It becomes smaller.
c. It does not change.
d. It is impossible to predict.
c
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Using graphs to illustrate the concepts, absolute advantage
A. is shown with differences in slope of a production possibilities curve; comparative advantage is shown with a lower curve. B. requires a very steep curve; comparative advantage requires a curve with a shallow slope. C. on one good requires that the slope of the production possibilities curve be steeper for that good. D. is shown with a higher production possibilities curve; comparative advantage is shown with differences in slope of the curves.
Which of the following is not a valid criticism of Fogel's (1964) methodology in his study of railroads?
(a) The canal prices used for 1890 were low. (b) The impact of railroads on financial markets is ignored. (c) The nonpecuniary gains from using railroads could have been considered. (d) The amount of land cultivated would have been reduced.
When there are economies of scale,
A) MC > AC, so cost-output elasticity is greater than AC. B) MC < AC, so cost-output elasticity is less than AC. C) MC < AC, so cost-output elasticity is greater than 1. D) MC < AC, so cost-output elasticity is less than 1. E) long-run marginal cost is declining.
_____________ can play a useful role in passing rules on how businesses operate, but these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.
a. People b. Cities c. Government d. The World Trade Organization