Fiscal policy can:
A. have real effects on the economy in the short run.
B. bring the economy to its long run equilibrium faster than it can correct itself.
C. cause inflation.
D. All of these are true.
D. All of these are true.
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If a company triples its output and its average cost decreases, then the firm is definitely experiencing
A) diseconomies of scale. B) decreasing marginal returns. C) increasing marginal returns. D) economies of scale. E) Both answers C and D are correct.
Which of the following best illustrates the concept of derived demand?
a. As income rises, the demand for TVs rises. b. A fall in the price of cameras will increase the demand for film. c. A fall in the demand for tires will reduce the demand for rubber. d. When the price of gasoline rises, the demand for automobile repair falls. e. If consumers expect the price of coffee to rise, demand for coffee rises.
Which of the following offers an example of frictional unemployment?
a. The rise in unemployment for stable workers after the development of gasoline-powered automobiles and the resulting long-tern decline in horse-and-buggy transportation. b. The rise in unemployment among farm workers after harvest. c. Unemployment resulting from the business cycle. d. None of the above are correct.
Institutions that channel funds from people who have them to people who want them are called:
A. financial intermediaries. B. corporations. C. the Federal Reserve. D. governmental agency.