If firms are producing below capacity,
a) it is not possible to increase output
b) they will charge higher prices to maintain profit levels
c) resources, especially labor, are in short supply
d) output can be expanded by hiring extra workers
e) an increase in aggregate demand will force firms into bankruptcy
d) output can be expanded by hiring extra workers
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Government in the United States plays an unimportant role in the economy because the rules for the functioning of the private economy are inherent in the markets themselves.
a. true b. false
A flat tax which does allow deductions for investment spending is a type of
A) investment tax. B) excise tax. C) luxury tax. D) consumption tax.
A firm's employment of labor outside the country in which the firm is located
A) is outsourcing. B) shifts the supply of labor in the original country. C) is the marginal revenue product. D) shifts the supply of labor in the other country.