In the Classical model, an increase in saving will result in saving being __________ than investment which will cause the interest rate to __________
A) greater; rise
B) greater; fall
C) less; rise
D) less; fall
B
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A firm sells 300,000 units per week. It charges $ 35 per unit, the average variable costs are $40, and the average costs are $55 . In the long run, the firm should
a. Shut-down as the firm is making a loss of $15 million per week b. Shut-down as the firm cannot cover the variable costs c. Shut down because the price is lower than average cost d. None of the above
Farm programs that guarantee a price higher than equilibrium
a. cause shortages b. decrease government spending c. decrease taxes d. raise farm property values e. increase suburban development
According to the Keynesian view, if policy makers thought the economy was about to enter an inflationary boom, which of the following would be most appropriate?
a. a tax increase b. a planned increase in the budget deficit c. an increase government expenditures d. a tax decrease
Most cartels cease to be effective because:
A. the dominant firm buys out the other firms. B. of the incentive to cheat on the cartel agreement. C. of strict enforcement of antitrust legislation. D. consumers discover the cartel and buy from other firms instead.