In the short run, firms increase output
A) only by increasing the size of their plant.
B) only by decreasing the size of their plant.
C) only by increasing the amount of labor used.
D) only by decreasing the amount of labor used.
E) either increasing the amount of labor used or increasing the size of their plant.
C
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Suppose government spending decreases by $100 billion and the marginal propensity to consume (MPC) is 0.8. Given this information, this decrease in government spending will cause a(n)
A) increase in equilibrium real GDP equal to $500 billion. B) increase in equilibrium real GDP equal to $800 billion. C) decrease in equilibrium real GDP equal to $800 billion. D) decrease in equilibrium real GDP equal to $500 billion.
What is imperfect competition?
What will be an ideal response?