Which of the following statements is true when total spending equals total output?
a. Saving plus taxes equals investment plus government purchases.
b. Output equals investment plus government purchases plus saving plus taxes.
c. Output equals consumption spending plus investment plus government purchases plus saving plus taxes.
d. Output equals consumption plus investment plus taxes.
e. Saving plus investment equals taxes plus government purchases.
A
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Assume that firms in a perfectly competitive market are earning economic profits. Which of the following statements describes the change in market price and output as a result of the entry of new firms into this market?
A) The market demand curve shifts to the right, causing price to rise and market output to increase. B) The market demand curve shifts to the left, causing price to fall and market output to decrease. C) The short-run market supply curve shifts to the right, causing price to fall and total market output to increase. D) The short-run market supply curve shifts to the left, causing price to rise and total market output to decrease.