If revenue in the short run is less than variable costs, what should the firm do?
What will be an ideal response?
The firm should shut down to minimize losses (i.e., loss equal to fixed costs only).
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In the United States between the 1970s and the 2000s, the productivity of labor increased. This increase led to
A) an increase in the demand for labor. B) no change in either the demand for or the supply of labor. C) a decrease in the supply of labor. D) a downward shift of the production function. E) an increase in the supply of labor.
A higher nominal interest rate ________ the profit-maximizing level of MPK for firms, leading firms to a ________ capital-output ratio, thus ________ net investment
A) raises, higher, raising B) raises, lower, lowering C) lowers, higher, raising D) lowers, higher, lowering E) lowers, lower, raising
Private disposable income is equal to
A) Y + TR + INT - T. B) Y + NFP + TR + INT - T. C) Y - TR - INT + T. D) Y + CA - G.
Inflation targeting alleviates the problem of
a. money multiplier instability that makes money targeting difficult. b. time inconsistency. c. a lack of credibility in monetary policy. d. both b and c. e. all of the above.