Which of the following would be a fixed input to an automobile firm?
A) steel
B) a plant in California
C) car batteries
D) engineers
Answer: B
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When Fatz confectionery can lower the cost of manufacturing and packaging a pound of candy by doubling the quantity manufactured and packaged each day, it will achieve
A) economies of scope. B) economies of scale. C) economies of team production. D) all of the above
If some industries exhibit internal increasing returns to scale in each country, we should not expect to see
A) perfect competition in these industries. B) intra-industry trade between countries. C) inter-industry trade between countries. D) high levels of specialization in both countries. E) increased productivity in both countries.
In the ISLM framework, a declining price level causes
A) interest rates to rise. B) income to fall. C) saving to rise. D) the LM curve to shift to the right.
Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to ________ and shifts the IS curve ________.
A. decrease; up and to the right B. increase; down and to the left C. increase; up and to the right D. decrease; down and to the left