Which of the following statements concerning the circular flow model is (are) correct?
a. an increase in planned savings always generates an increase in planned investment spending.
b. planned investment spending is an injection into the circular flow.
c. increased investment always results in decreased savings.
d. All of these are correct.
b. planned investment spending is an injection into the circular flow.
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In the long run, marginal cost must equal marginal revenue for a monopolistic competitive firm, but not at the minimum point of the long-run average cost curve
a. True b. False Indicate whether the statement is true or false
According to the law of increasing opportunity cost,
a. opportunity cost rises as technology improves b. the production possibilities frontier is a straight line c. opportunity cost rises as society produces more of a good or service d. the production possibilities frontier is convex with respect to the origin (that is bowed toward the origin) e. monetary costs rise as opportunity cost rises
If a central bank were required to target inflation at zero, then when there was an unanticipated decrease in aggregate demand the central bank
a. would have to increase the money supply. This would move unemployment closer to the natural rate. b. would have to increase the money supply. This would move unemployment further from the natural rate. c. would have to decrease the money supply. This would move unemployment closer to the natural rate. d. would have to decrease the money supply. This would move unemployment further from the natural rate.
Which of the following is most likely to be a fixed cost?
A. Shipping charges B. Wages for unskilled labor C. Property insurance premiums D. Expenditures for raw materials