In the short run, a competitive firm will not produce unless price is equal to average total costs.
Answer the following statement true (T) or false (F)
False
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In the figure above, what is the MPC?
A) 0.75 B) 1.00 C) 0.50 D) 0.80 E) 0.90
Long-run aggregate supply shocks are a source of business cycle fluctuations in ________
A) traditional Keynesian and new Keynesian theory B) new Keynesian and real business cycle theory C) real business cycle and traditional Keynesian theory D) traditional Keynesian, new Keynesian and real business cycle theory
Refer to the above diagram. When AD1 shifts to AD2, then at P1Q3 output demanded will:
A. equal output supplied. B. be less than output supplied. C. exceed output supplied. D. be at stable full-employment GDP.
A reduction in the rate of depreciation will cause the discounted present value of expected profits to
A) decrease. B) increase. C) remain unchanged if the real interest rate increases by the same amount. D) none of the above