If the average variable cost curve is above the marginal cost curve, then
A. average variable costs must be increasing.
B. marginal costs must be increasing.
C. marginal costs must be decreasing.
D. marginal costs can be either increasing or decreasing.
Answer: D
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Lower interest rates which reduce the debt-servicing burden of households, thus increasing their net worth, is best described by the
A) bank lending channel. B) money channel. C) financial market channel. D) balance sheet channel.
If a government determines that the provision of services by museums should be encouraged, then this means that the government has judged museum displays to be a(n)
A) government-sponsored good. B) exclusive good. C) government-inhibited good. D) public good.
When the economy is at its natural rate of unemployment,
A) it is still experiencing frictional and cyclical unemployment. B) it is still experiencing structural and cyclical unemployment. C) it is still experiencing frictional, seasonal, and structural unemployment. D) it is still experiencing frictional, structural, and cyclical unemployment.
Keynesians:
a. accept the countercyclical policy of doing nothing, that is, allowing market forces to work. b. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment. c. accept the fact that policymakers should eliminate inflation first before focusing on unemployment. d. focus on increasing aggregate demand in order to stimulate the economy. e. were prepared for the events that beset our economy in the 1970s and 1980s.