When production is characterized by persistently declining long-run average costs as output increases
A. there is no need for the government to limit competition by licensing requirements.
B. the costs are lower if a single firm exists, and even if the firm is unregulated, price will still be lower with a single firm.
C. the costs of production are greater when competition exists than when a single firm produces a good.
D. it is impossible for two firms to compete in the market.
Answer: C
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If the government increases taxes while holding expenditures constant,
A) the bond supply curve will shift to the left and the equilibrium interest rate will fall. B) the bond supply curve will shift to the right and the real interest rate will fall. C) government borrowing will be increased. D) the government's deficit will increase.
Theoretically, when a currency depreciates one can predict that
a. the price level will rise and real GDP will rise. b. the price level will fall and real GDP will fall. c. real GDP will rise, but price change is not predictable. d. the price level will rise, but real GDP change is not predictable.
Which of the following is true?
a. Investment in the stock market is a relatively foolproof method for an investor to earn a high rate of return during the next five years. b. Current stock prices already reflect information that is known with a high degree of certainty. c. Experts are able to predict changes in the direction of the broad stock market indexes with a high degree of accuracy. d. While changes in the prices of specific stocks are difficult to predict, it is relatively easy to predict the future direction of the broad stock market. e. Both c and d are true.
Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had flexible exchange rates, these flows would have had the following effect on the financial account and monetary base
a. Financial account would rise and reserves account would fall. b. Financial account would not change and reserves account would fall. c. Financial account would not change and reserves account would not change. d. Financial account would fall and monetary base would not change. e. Financial account would fall and reserves account would rise.