What is meant by the term "excess capacity" as it relates to monopolistically competitive firms?
Monopolistically competitive firms produce a level of output lower than the efficient scale of output and are therefore said to have excess capacity.
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What is the difference, if any, between physical capital and financial capital?
What will be an ideal response?
We shouldn't be concerned about U.S. currency held abroad because
A) the currency will never return to the United States. B) foreigners use it to buy U.S. bonds. C) it represents an interest-free loan to the United States. D) foreigners can't spend it in their own countries.
Efficiency refers to whether a market outcome is fair, while equality refers to whether the maximum amount of output was produced from a given number of inputs
a. True b. False Indicate whether the statement is true or false
A significant example of a temporary tax cut was the one announced in 1992 by President George H. W. Bush. The effect of that tax cut on consumer spending and aggregate demand was
a. zero. b. likely smaller than if the cut had been permanent. c. likely about the same as if the cut had been permanent. d. likely larger than if the cut had been permanent.