If a firm increases inputs by 15 percent and output increases by 12.5 percent, the firm is experiencing
a. increasing returns to scale.
b. decreasing returns to scale.
c. constant returns to scale.
d. increasing costs per unit of output.
b
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Which of the following statements is true?
A) An individual's current spending increases when he lends money. B) An individual's current spending decreases when he borrows money. C) An economic agent lends to move his spending from the future to the present. D) An economic agent lends to earn a return.
In the long run, a higher government budget deficit causes
A) a decrease in both private spending and equilibrium real GDP. B) an increase in both private spending and equilibrium real GDP. C) a decrease in private spending while equilibrium real GDP remains unchanged. D) no change in private spending but a decrease in equilibrium real GDP.
If the marginal propensity to save (MPS) is 0.5 and net exports falls by $100 million, then
A) real Gross Domestic Product (GDP) will increase by $100 million. B) real Gross Domestic Product (GDP) will fall by $200 million. C) real Gross Domestic Product (GDP) will not change. D) the effect on real Gross Domestic Product (GDP) cannot be determined from the given information.
The natural rate of unemployment corresponds to what is sometimes called the full employment unemployment rate
a. True b. False Indicate whether the statement is true or false