Figure 19-3
Which panel in Figure 19-3 represents the case of an effective usury law?
A. 1
B. 2
C. 3
D. 4
Answer: D
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Assume the market price is greater than average total cost at the perfectly competitive firm's profit-maximizing level of output
In this case, the firm is earning positive economic profits, which act as an incentive for new firms to enter the market. Indicate whether the statement is true or false
If the aggregate supply curve is horizontal,
a. there are unemployed resources in the economy. b. the economy is inside the production possibilities curve. c. it is possible to increase output without driving up prices by putting unemployed resources to work. d. All of these.
Why does unemployment tend to change when the level of output changes?
a. Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller output. b. Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls. c. When output rises, persons are more interested in buying, and will work more to earn the income to buy things. d. Persons face the option of buying or working, so that when they do more of one, the other necessarily falls. e. When companies replace workers with machines, output rises, and people take time off from work to buy before returning to employment.
The Federal Reserve is a branch of the Treasury Department, and is therefore subject to significant government control.
Answer the following statement true (T) or false (F)