Refer to the graph shown. No changes in fiscal policy are advisable when the economy is at point:
A. A.
B. B.
C. C.
D. D.
Answer: C
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All of the points on a budget line result in combination of goods that expend all of her income.
Answer the following statement true (T) or false (F)
How many of the following business cycle facts can be explained if the primary cause of business cycles is temporary changes in total factor productivity: procyclical consumption, procyclical investment, procyclical employment, and procyclical real
wages? A) one B) two C) three D) four
Certain factors that are probably important in determining wages are nevertheless difficult to measure. Consequently, labor economists find those factors difficult to incorporate into their studies of labor markets and wages. Those factors include
a. effort and natural ability. b. natural ability and years of experience. c. years of experience and job characteristics. d. race and job characteristics.
Given the exit rule, where does a firm's long-run supply curve derive from? It is the section of the:
A. MC curve that lies above the ATC curve. B. AVC curve to the right of its minimum. C. MC curve that lies above the AVC curve. D. ATC curve to the right of its minimum.