When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline
B. increase; raise; decline
C. decline; lower; expand
D. decline; raise; decline
Answer: C
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Which of the following statements is true about revenue?
A) Revenue is calculated by dividing the price per unit by the number of units sold. B) The terms "revenue" and "profit" can be used interchangeably. C) A firm's revenue will increase as its costs increase. D) Revenue is the total amount received for selling a good or service.
The theory of optimum currency areas predicts that
A) floating exchange rates are most appropriate for areas closely integrated through international trade and factor movements. B) fixed exchange rates are most appropriate for areas that are loosely integrated through international trade and factor movements. C) fixed exchange rates are most appropriate for areas closely integrated through international trade and factor movements. D) floating exchange rates are most appropriate for all countries in Europe. E) fixed exchange rates are most appropriate for all countries in Europe.
If a firm is practicing two-part pricing and it is charging a user fee that is ________ its marginal cost, it has customers with ________ demands.
A) less than; nonidentical B) greater than; nonidentical C) greater than; identical D) less than; identical
Explicit costs would include
a. the rent paid by a business owner for office space b. the interest loss of the business owner on money withdrawn from his/her savings account and invested in the business c. the loss of rent on a building the business owner owns and uses in his/her business d. the opportunity costs of the business owner's time e. the use of tools owned by the business owner and dedicated to the business