The president of Toyota's Georgetown plant was quoted as saying, "Demand for high volumes saps your energy. Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years"
This quote suggests that
A) as Toyota expanded its capacity, it experienced diseconomies of scale.
B) Toyota was focused on "churning" out cars for which it did not invest sufficiently in training its workers.
C) high demand for Toyota's cars prevented the company from focusing on its strength: auto design.
D) Toyota was experiencing an excess demand for its automobiles which it had difficulty keeping up with.
A
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Ignoring any supply-side effects, suppose the government is considering cutting taxes by $100 billion or increasing government expenditures on goods and services by $100 billion. Then
A) both policies would increase aggregate demand but the increase in government expenditure has a smaller effect. B) the tax cut would increase aggregate demand and the increase in government expenditure would decrease aggregate demand. C) the tax cut would decrease aggregate demand and the increase in government expenditure would increase aggregate demand. D) both policies would increase aggregate demand by the same amount. E) both policies would increase aggregate demand but the tax cut has a smaller effect.
A recession will occur if an economy’s actual GDP ____ its potential GDP.
A. rises above B. equals C. falls below D. grows faster than
Monopolistic competition is characterized by
a. one firm selling several products. b. many firms selling the same product. c. many firms selling slightly different products. d. one firm selling one product.
Risk in finance means that an asset
A. Does not pay dividends B. Does not pay capital gains C. Has a present value that is negative D. Has future payments that are uncertain