The economy experiences an increase in the price level and an increase in real domestic output. Which is a likely explanation?
A. The stock of capital has increased.
B. Wage rates have fallen.
C. Interest rates have increased.
D. Net exports have increased.
Answer: D
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The decrease in social surplus from a market distortion is referred to as:
A) deadweight loss. B) market loss. C) revenue loss. D) Pareto loss.
Holding demand constant, a reduction in supply leads to
A) lower prices and higher quantity demanded. B) lower prices and lower quantity demanded. C) higher prices and higher quantity demanded. D) higher prices and lower quantity demanded.
As a general rule, technological progress
a. shifts the production possibilities curve outward, away from the origin. b. reduces the slope of the production possibilities curve, making it flatter. c. increases the slope of the production possibilities curve, making it steeper. d. shifts the production possibilities curve inward, toward the origin.
For firms selling in competitive markets, the marginal revenue product curve slopes downward only because of increasing marginal returns to the resource
Indicate whether the statement is true or false