Which of the following happens during an economic recession?
a. At E1, RGDP is below potential GDP.
b. At E1, RGDP is above potential GDP.
c. At E1, RGDP is equal to potential GDP.
d. At E1, RGDP fluctuates with potential GDP.
a. At E1, RGDP is below potential GDP.
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In order to maximize its profit, a single-price monopoly always produces output in the inelastic range of the demand for its product
Indicate whether the statement is true or false
According to monetarists, the money supply ought to be changed
a. at the discretion of the Federal Reserve Board. b. at the discretion of the president. c. at a constant annual rate, regardless of economic conditions. d. Never.
Public goods differ from private goods in that
a. they produce negative externalities b. they are not scarce c. the benefits they generate cannot be denied to anyone d. their consumption must be regulated by the government e. their benefits are restricted to the one individual consuming the good
To maximize total surplus with a monopoly firm, a benevolent social planner would choose the level of output where
a. MR = MC. b. MR intersects the demand curve. c. MC intersects the demand curve. d. MR exceeds MC by the greatest amount.