A. households to save more
B. firms to produce less
C. firms to produce more
D. the MPC to change
Related Mcqs:
- Refer to Exhibit 6.If People in the economy expect inflation to be 6 percent but inflation turn out to be 3 percent the economy is operating at point ?
A. H
B. c
C. d
D. F - Refer to Exhibit 6.If People in the economy expect inflation to be 3 percent and inflation is 3 percent the economy is operating at point ?
A. b
B. I
C. a
D. H - Refer to Exhibit 6.Suppose the economy is in long-run equilibrium at point E. A sudden increase in government spending should move the economy in the direction of point ?
A. d
B. G
C. E
D. b - Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today ?
A. The impact on both price and quantity is ambiguous
B. Price will decrease, quantity is ambiguous.
C. price will increase, quantity will decrease
D. price will increase, quantity is ambiguous.
E. Price will increase, quantity will increase - When supply exceeds demand, sellers must lower prices to stimulate sales, when demand exceeds supply, prices increase as buyers compete to buy goods. What this theory is called in economics?
A. Cost push theory
B. Supply and Demand theory
C. Fundamental theory
D. Ricardo’s theory - If government spending exceeds tax collections?
A. there is a budget deficit
B. None of these answers
C. There is a budget surplus
D. private saving is positive - Suppose a wave of investor and consumer optimisms has increased spending so that the current level of input exceeds the long-run natural rate If policy makers choose to engage in activist stabilization policy they should ?
A. decrease government spending Which the shifts the aggregate demand curve to the left
B. decrease taxes, which shifts the aggregate demand curve to the right
C. decrease taxes, which shifts the aggregate demand curve to the left
D. decrease government spending which shifts the aggregate demand curve to the right - In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that ?
A. 3>2>1
B. 3=2=1
C. 3<2<1
D. any measure can be larger or smaller than any other - Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the long run ?
A. Output falls; prices are unchanged from the initial value
B. Price fall; output is unchanged from its initial value
C. Output and the price level are unchanged from their initial values
D. Prices rise; output is unchanged from its initial value - Less demand in the economy may increase unemployment; this may lead to less spending which may reduce demand further. This is called ?
A. The upward accelerator
B. The downward multiplier
C. The upward PPF
D. The downward mpc
