If Congress passed new laws significantly increasing the regulation of business, this action would tend to:
A. increase per-unit production costs and shift the aggregate demand curve to the left.
B. increase per-unit production costs and shift the aggregate supply curve to the right.
C. decrease per-unit production costs and shift the aggregate supply curve to the left.
D. increase per-unit production costs and shift the aggregate supply curve to the left.
Answer: D
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Which of the following is TRUE?
A) Economic efficiency occurs if the maximum feasible amount of output is achieved from a given quantity of inputs. B) Economic efficiency depends only on what is feasible. C) If production is technologically efficient then it must be economically efficient. D) None of the above statements are correct.
To reduce the principal-agent problem
A) boards-of-directors can tie the salaries of top management to the profitability of the firm. B) managers can inflate profits on financial statements. C) managers can take on more risk than they disclose to investors. D) managers can hide liabilities by not disclosing them on financial statements.
Purchasing power parity may not hold in practice due to all of the following except
A) transportation costs. B) cross-country differences in environmental regulations. C) trade barriers like tariffs and quotas. D) the existence of non-traded goods.
An economy could produce above its potential GDP for a short period of time by
A. reducing the size of the labor force. B. increasing the price of final goods and services. C. adding extra shifts of work, such as overtime or night shifts. D. increasing the money supply.