When a firm experiences diseconomies of scale,
a. short-run average total cost is minimized.
b. long-run average total cost is minimized.
c. long-run average total cost increases as output increases.
d. long-run average total cost decreases as output increases.
c
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
The rate of return on bonds is lower than on stocks over time because
A) bond holders cannot diversify. B) bonds have a lower standard deviation in returns. C) stocks have less non-diversifiable risks than bonds. D) bonds are subject to more random risks than stocks.
Loss aversion is the tendency to:
A. weigh gains more heavily than losses. B. dislike gains, but enjoy losses. C. enjoy gains, but dislike losses. D. weigh losses more heavily than gains.
In theory, partially-flexible exchange rates:
A. permit sizable exchange rate fluctuations, as long as they foster movement toward the long-run equilibrium exchange rate. B. require a very high level of official reserves. C. allow speculative pressures to affect exchange rates. D. impose no limitations on a country's monetary and fiscal policy.