The total of all planned expenditures in the entire economy is the definition of
A. production possibilities curve.
B. net domestic product.
C. aggregate supply.
D. aggregate demand.
Answer: D
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With respect to Friedman's natural rate theory, expansionary monetary policies can
a. move output above the natural rate but leave unemployment at the natural rate in the short-run. b. only affect inflation and not unemployment in the long-run. c. leave output at its natural rate with a simultaneous decrease in the natural rate of employment. d. move output and employment below the natural rate.
GreenTree Corporation sells live Christmas trees. It observes that when it increases the price of Christmas trees by 10 percent, revenue rises by 25 percent. The demand for Christmas trees is:
A. perfectly elastic. B. elastic. C. inelastic. D. unit elastic.
Many states had their own insurance fund to protect depositors. The critical problem with these state funds is:
A. they do not have regulators as knowledgeable as the regulators at FDIC. B. they are monopolies in their own state and extract extremely high prices for the insurance they provide. C. no state fund is large enough to withstand a run on all of the banks it insures. D. they are highly inefficient they cannot achieve the economies of scale a federal fund can achieve.
If Quick Auto Service increases the size of its shop, enabling it to purchase cost-saving capital equipment so that the cost of servicing a car falls, this would be an example of
A) economies of scope. B) economies of scale. C) monitoring. D) increasing transactions costs.