Suppose the economy is on the intermediate range of the aggregate supply curve. Which of the following would reduce both real GDP and the price level?
a. A decrease in aggregate supply.
b. An increase in aggregate supply.
c. A decrease in aggregate demand.
d. An increase in aggregate demand.
c
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Consider a general cost function C(q), with Average Cost=C(q)/q. Prove using calculus that the quantity which minimizes the Average Cost function is also at the point where the Marginal Cost equals the Average Cost
To do this, first derive the necessary condition for the AC to be at a minimum.
The following is budget information for a hypothetical economy. All data are in billions of dollars.YearGovernment SpendingTax RevenuesGDP1$1,100$1,000$10,00021,2501,40010,20031,4501,45010,50041,6001,50010,90051,8001,55011,200Refer to the above data. In which year is there a budget surplus?
A. Year 1 B. Year 2 C. Year 3 D. Year 4