An economy with a trade surplus will experience a net inflow of international financial capital
a. True
b. False
Indicate whether the statement is true or false
False
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Research on labor supply generally shows that
A) labor supply rises in response to a permanent increase in the real wage, but falls in response to a temporary increase in the real wage. B) labor supply rises in response to a temporary increase in the real wage, but falls in response to a permanent increase in the real wage. C) labor supply rises in response to both a temporary and a permanent increase in the real wage. D) labor supply falls in response to both a temporary and a permanent increase in the real wage.
Which of the following is most likely an example of constant returns to scale?
A. Alpha-Beta Inc. raised its price 10 percent after a 5 percent increase in production costs. B. The XYZ Co. increased production 25 percent and experienced a 30 percent increase in its total cost. C. The per-unit costs of Excel Publishing Company's manuals fell after a large order was received from the government. D. Widget Manufacturing doubled its production by opening a new plant that was identical to its old plant.
Suppose that at 500 units of output marginal revenue is equal to marginal cost. The firm is selling its output at $5 per unit and average total cost at 500 units of output is $6. On the basis of this information, we:
A. can say that the firm should close down in the short run. B. can say that the firm can produce and realize an economic profit in the short run. C. cannot determine whether the firm should produce or shut down in the short run. D. can assume the firm is not using the most efficient technology.