Ignoring any supply-side effects, if government expenditure on goods and services decrease by $10 billion and taxes decrease by $10 billion, then real GDP ________ and the price level ________
A) increases; falls
B) decreases; falls
C) does not change; does not change
D) increases; rises
E) decreases; rises
B
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When a firm's long-run average total cost falls as its output increases, the firm is experiencing
A) economies of scale. B) diseconomies of scale. C) constant returns to scale. D) decreasing marginal returns. E) decreasing cost of marginal returns.
Pre-commitment is:
A. a solution for dynamic inconsistency. B. a choice that increases the number of future options. C. a way to force "bad" choices by removing future good options. D. All of these are true about pre-commitment.
The CPI is a measure of the overall cost of the goods and services bought by
a. a typical consumer, and the CPI is computed and reported by the Department of the Treasury. b. typical consumers and typical business firms, and the CPI is computed and reported by the Department of the Treasury. c. a typical consumer, and the CPI is computed and reported by the Bureau of Labor Statistics. d. typical consumers and typical business firms, and the CPI is computed and reported by the Bureau of Labor Statistics.
If profit regulation is used to control a natural monopolist, the monopolist is likely to
A. Reduce maintenance of plants and equipment. B. Increase the quality of its product in an effort to increase sales. C. Attempt to reduce the costs of production. D. Inflate or pad the costs of production.