In a long-run perfectly competitive equilibrium
A) P = MR = MC > ATC.
B) P = MR > MC = ATC.
C) P = MR = MC = ATC.
D) P > MR > MC = ATC.
Answer: C
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The real interest rate is the rate at which borrowers or lenders ________ to make transactions when issuing or receiving loans
A) are required B) refuse C) expect D) can only obtain from a financial intermediary
An important cause of recessions is an unexpected negative supply shift, such as higher oil prices.
Answer the following statement true (T) or false (F)
More economic growth is not necessarily better unless the benefits of growth:
A. exceed the costs of growth. B. increase average labor productivity. C. increase human capital. D. increase real GDP per capita.
Because of the multiplier, a one-time change in expenditure will.
a) have little secondary effect on real GDP b) expand real GDP by an infinite amount c) generate more additional real GDP than the initial change in expenditure d) decrease saving and investment activity and thereby decrease future real GDP