The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month
Therefore
A) ABC will soon go out of business.
B) to reach minimum efficient scale ABC would have to sell at least 3,000 routers each month.
C) ABC is experiencing diminishing returns.
D) ABC is experiencing diseconomies of scale.
B
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If the MPC is 0.75, the multiplier is equal to
A) 5. B) 0.75/0.25 = 3. C) 0.25. D) 4.
If the economy is on the IS curve, but is to the left of the LM curve, then the ________ market is in equilibrium, but the interest rate is ________ the equilibrium level
A) goods; below B) goods; above C) money; below D) money; above
Classify each of the following as debits or credits in the U.S. balance of payments. A. Russian tourists travel to United States. B. U.S. gives foreign aid to Bosnia. C. British investors purchase U.S. government bonds. D. American tourists travel to
Australia. E. Volkswagen earns profits in the United States from its new cars. F. Toyota builds a new plant in Ohio. G. Capital Records sells rock and roll music in Sweden. H. German consumer buy Ronco Vegematics made in United States. I. Procter & Gamble earns profits in their Mexican facility.
The real risk-free interest rate is equal to:
a. Society's time preference for money. b. The tradeoff that society must make between buying a foreign or domestic product. c. For most nations, the rate at which financial institutions can borrow from each other when the expected inflation rate is equal to zero. d. None of the above is correct.