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
Answer: B
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Indicate whether the statement is true or false
The price elasticity of supply
A) is the slope of the supply curve. B) is the percentage change in quantity supplied divided by the percentage change in price. C) is always negative. D) does not vary between the long and the short run.
Saving time by driving faster is an example of a ________ of driving faster. Increasing the severity of injuries from a potential accident due to driving faster is a(n) ________ of driving faster.
A. nominal cost; real cost B. marginal cost; nominal cost C. marginal benefit; marginal cost D. normative benefit; opportunity cost
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A) is the price at which the firm's current liabilities are paid off. B) is the price at which a firm's total revenues equal total costs. C) occurs at the output at which the firm yields a below normal rate of return. D) occurs at the output at which the firm yields a positive economic profit.