If marginal cost exceeds average total cost in the short run, then which is likely to be true?
A. Average total cost is increasing
B. Average variable cost is decreasing
C. Average total cost is less than average variable cost
D. Marginal cost is less than average variable cost
A. Average total cost is increasing
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When two countries choose to use a new currency, they are
A) participating in a monetary union. B) dollarizing. C) forming an optimal currency area. D) increasing their monetary autonomy.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and reserves account in the context of the Three-Sector-Model? a. The real risk-free interest rate falls and reserves account becomes more
negative (or less positive). b. The real risk-free interest rate rises and reserves account becomes more negative (or less positive). c. The real risk-free interest rate and reserves account remain the same. d. The real risk-free interest rate rises and reserves account remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Frictional unemployment is:
A. unemployment caused by workers who are changing their location, job, or career. B. a mismatch between the skills workers can offer and the skills that are in demand. C. the most alarming cause of unemployment. D. the effect of wages remaining persistently above the market-clearing level.
Classical macroeconomic theorists believed that during an economic downturn, wages would ________, which in turn would lead prices to ________.
A. rise; fall B. fall; fall C. rise; rise D. fall; rise