The law of diminishing marginal product is responsible for
A. diseconomies of scale.
B. none of the long-run relationships.
C. constant returns to scale.
D. economies of scale.
Answer: B
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If revenue in the short run is sufficient to offset variable costs but not all fixed costs, what should the firm do?
What will be an ideal response?
GPDI is ________ volatile than total consumption spending
A) much more B) slightly more C) slightly less D) much less
If the current account is in surplus and the capital account is zero, then
A) net exports must be positive. B) the balance of payments must be in surplus. C) the financial account must be in deficit. D) there is a capital inflow.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more negative (or less positive). b. Real GDP and current international transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. Real GDP falls, and current international transactions become more negative (or less positive). e. Real GDP rises, and current international transactions remain the same.