The vertical intercept of the consumption function measures autonomous consumption.
It represents the combined impact on consumption spending of all factors other than
disposable income.
If businesses become very pessimistic and reduce spending, which of the following is
the most likely in the short run?
a. An increase in output, an increase in money demand and an increase in the interest
rate.
b. A decrease in output, an increase in money demand and an increase in the interest
rate.
c. A decrease in output, a decrease in money demand and a decrease in the interest rate.
d. An increase in output, a decrease in money demand and a decrease in the interest
rate.
e. A decrease in output, a decrease in money demand and an increase in the interest rate.
When real GDP is falling, the economy is experiencing
a. a recession.
b. a financial crisis.
c. an expansion.
d. equilibrium.
e. environmental deterioration.
The table below shows the total number of loaves of bread a bakery can bake per year
with different numbers of ovens. The market for bread is perfectly competitive, with a
market price of $2 per loaf. For which oven is the value of marginal product equal to
$1400?
If the Fed increases the money supply, the interest rate
a. rises and spending increases
b. rises and spending decreases
c. falls and spending increases
d. falls and spending decreases
e. falls, business spending increases, and consumer spending decreases
The monopolistically competitive firm shown in Figure 11-4
Refer to Figure 14-4. If the interest rate is currently 12 percent, we would expect the
a. interest rate to fall to 10 percent
b. interest rate to remain at 12 percent
c. interest rate to fall to 6 percent
d. quantity of money held to decrease to $500 billion
e. money supply to increase to $700 billion
In comparing a job that requires a high level of skill to one for a job that requires a low
skill level, the high-skill job
Which of the following, necessarily, equals zero when the firm’s short-run output level
is zero?
Total cost is