If a firm that experiences economies of scope doubles its production of an item, its costs will less than double
a. True
b. False
B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
The costs of investment depend on the ________ and the ________.
A. price of new capital goods; real interest rate B. relative price of the firm's output; real interest rate C. marginal product of capital; relative price of the firm's output D. taxes levied on the revenue generated; relative price of the firm's output
Under conditions of perfect competition, if any one buyer increases her purchases, the market price
a. rises b. remains unchanged c. falls d. either rises or falls e. will change, but in an unpredictable fashion
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.