A positive demand shock increases consumer and investment spending and tends to decrease the budget deficit.
Answer the following statement true (T) or false (F)
True
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Assume a firm reduces its cost by shifting from paychecks to payroll cards, which are stored-value cards onto which the companies can download employees' wages and salaries electronically. If the only factor of production the firm varies in the short run is the number of hours worked by people already on its payroll, would the shift from paychecks to payroll cards reduce the firm’s total fixed costs or its variable costs?
A. Since the wages paid to? employees, the? firm's variable labor? input, have not? changed, variable costs are unaffected. If the switch from issuing paychecks to payroll cards is? cost-reducing, this change will cut its fixed costs of meeting its payrolls. B. Since the number of hours worked is? variable, the variable cost of processing the payroll? changes; therefore, the cost savings must come from a reduction in variable costs in the short run. C. Since the number of hours worked is? variable, the variable cost of processing the payroll? changes; therefore, the cost savings must come from a reduction in variable costs in the long run. D. Since the wages paid to? employees, the? firm's variable labor? input, have? changed, if the switch from issuing paychecks to payroll cards is? cost-reducing, this change will cut its variable costs of meeting its payrolls.
When the small home nation imposes a tariff of $10, the domestic price:
a. rises by more than $10. b. rises by $10. c. rises by less than $10. d. does not change.
Which of the following examples of product differentiation uses location?
a. A restaurant promotes its make-your-own hamburgers. b. In an ad, a restaurant says it is situated on a beautiful lake. c. A bed-and-breakfast touts its four-star rating on its website. d. The trailer for a movie presents several excellent reviews from critics.
One advantage of a proprietorship is that
A) it is relatively easy to raise financial capital for a proprietorship. B) a proprietorship is relatively easy to form and to dissolve. C) there are limits to the possible liabilities of the owner. D) depreciation rates on capital are higher.