In the short run, the equilibrium level of real GDP
A) is necessarily less than potential GDP.
B) is necessarily equal to potential GDP.
C) is necessarily greater than potential GDP.
D) could be less than, equal to, or greater than potential GDP.
D
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Which of the following statements is true?
A) Firms usually tend to lay off workers than cut wages to reduce costs. B) Firms tend to increase wages in periods of contracting economic activity to boost morale. C) Firms tend to decrease wages in periods of contracting economic activity to boost labor productivity. D) Firms usually tend to cut wages than lay off people to cut costs.
In a Cournot equilibrium, each firm chooses an output level that
a. maximizes joint profits. b. maximizes the price received. c. maximizes profits given what the other firm produces. d. maximizes revenue given what the other firm produces.
Exhibit 20-1 Money market demand and supply curves
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Beginning from an equilibrium at E1 in Exhibit 20-1, a decrease in the money supply from $150 billion to $100 billion causes people to:
A. sell bonds and drive the price of bonds down. B. sell bonds and drive the price of bonds up. C. buy bonds and drive the price of bonds down. D. buy bonds and drive the price of bonds up.
If a manager who does not own a company is allowed to make decisions for the company, then
A. the decisions will usually be effective. B. the manager usually assumes the same position as the owner. C. a control system of rewards and evaluation must be set up. D. inappropriate decisions will be taken.