Refer to Figure 5.2, which shows a family of average cost curves. The average variable cost curve is represented by:
A. Curve 1.
B. Curve 2.
C. Curve 3.
D. the vertical sum of curve 2 and curve 3.
Answer: B
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When the Fed makes higher interest payments on bank reserves, banks will hold ________ reserves which will ________ the money supply
A) less; increase B) less; decrease C) more; increase D) more; decrease
If a firm's MPK is below its user cost of capital, it is employing too ________ capital and its profit is ________ in the long run
A) little, above what it will be B) little, below what it could be C) much, above what it will be D) much, below what it could be
Monopolistically competitive firms have monopoly power because they
A) face downward sloping demand curves. B) are great in number. C) have freedom of entry. D) are free to advertise.
Refer to the information. If the economy's tax schedule was T = .2Y rather than T = T 0 = 30, the equilibrium GDP would be:
Answer the question on the basis of the following information for a mixed
open economy. The letters Y, C a , I g , X n , G, and T stand for GDP, consumption, gross
investment, net exports, government purchases, and net taxes respectively. Figures are in
billions of dollars.
A. $387.5.
B. $518.5.
C. $316.
D. $412.