If an increase in the federal deficit stimulates an economy, _____
a. an expansionary gap exists in the economy
b. the crowding in of private investment takes place
c. the crowding out of private investment offsets crowding in of private investment
d. the crowding out and crowding in of private investment cancels each other out
e. interest rates increase significantly
b
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What determines the perfect competitor's supply curve? How is the industry supply curve found?
What will be an ideal response?
Economic profit is equal to:
A. total revenue minus accounting profit. B. total revenue minus the sum of explicit and implicit costs. C. accounting profit minus explicit costs. D. accounting profit plus implicit costs.
Assuming price elasticity of demand is reported as an absolute value, a price elasticity of demand greater than one indicates demand:
A. for the good is inelastic. B. for the good is elastic. C. for the good is unitary elastic. D. can not be determined without more information.
Suppose the short-run supply curve is a straight line of slope +1 that intersects the origin. The long-run supply curve will be
A) horizontal. B) steeper. C) shallower. D) vertical.