Investment expenditures consists of
A) Purchase of farmland. B) Construction of office buildings.
C) Construction of new roads and bridges. D) All of the above.
Answer: B
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Collusion occurs when
a. a firm chooses a level of output to maximize its own profit b. firms get together to maximize joint profits c. firms refuse to follow their price leaders d. firms petition their U.S. senators for favors e. two firms' price and output decisions come into conflict
Which of the following is true of a production possibility frontier?
a. Producing on the production possibilities frontier implies productive efficiency, and society producing where it wants to be producing implies allocative efficiency. b. Producing on the production possibilities frontier implies allocative efficiency, and society producing where it wants to be producing implies productive efficiency. c. Producing on the production possibilities frontier implies both productive efficiency and allocative efficiency. d. Producing where the society wants to be producing implies both productive efficiency and allocative efficiency.
Generally, if people begin to expect a company to have higher future profits, the price of the company's stock will begin to decrease
a. True b. False Indicate whether the statement is true or false