The financial market shock which occurred during the recession of 2007-2009 increased the default-risk premium, causing the
A) IS curve to shift to the right.
B) IS curve to shift to the left.
C) MP curve to shift up.
D) MP curve to shift down.
C
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During a(n) ________ many firms experience reduced profits, which reduces ________ and investment spending
A) recession; government spending B) recession; cash flow C) expansion; cash flow D) expansion; business confidence
Proponents of a command economy argue that it promotes:
A. efficiency. B. equity. C. consumer sovereignty. D. economic growth.
________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production
A) Competition B) Voluntary exchange C) Equity D) A centrally planned economy
Answer the following questions true (T) or false (F)
1. If a firm is experiencing diseconomies of scale, its long-run average cost curve is increasing. 2. A U-shaped long-run average cost curve implies that a firm experiences economies of scale at low levels of production and diseconomies of scale at high levels of production.