Constant returns to scale occur when:
a. long-run average total cost decreases with an increase in output
b. long-run average total cost increases with an increase in output.
c. long-run average total cost remains constant with an increase in output.
d. long-run average variable cost decreases with an increase in output.
c
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Over time, overall responsibility for formulating monetary policy has become increasingly concentrated in the
A) Federal Reserve Bank of New York. B) Council of Economic Advisors. C) Federal Deposit Insurance Corporation. D) Federal Reserve Board of Governors.
In a closed economy, the total quantity of goods demanded equals the sum of
A) consumption spending, investment spending, and government spending. B) consumption spending, national saving, and taxes. C) consumption spending, government spending, and taxes. D) investment spending, national saving, and taxes.
Assume the Federal Reserve increases the required reserve ratio from 10 to 20 percent and reserves are $80 billion. Then the change in the money supply will be
a. $80 billion. b. $20 billion. c. $400 billion. d. $800 billion. e. none of the above
If a monopolist is producing the quantity at which marginal revenue exceeds marginal cost, it should
A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) reduce price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits.