The dramatic rise in the dollar between 1981 and 1986 was the result of a(n)
A. tight monetary and tight fiscal policy.
B. expansive monetary and expansive fiscal policy.
C. expansive monetary and tight fiscal policy.
D. tight monetary and expansive fiscal policy.
Answer: D
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Two firms producing identical products may merge due to the existence of:
A. economies of scale. B. cost complementarities. C. economies of scope. D. All of the statements are correct.
The value of the multiplier ________ as the marginal propensity to save decreases
A) decreases B) increases C) is constant D) becomes negative
If the inflation rate is 5 percent and the real interest rate is 2.5 percent, then the nominal interest rate is
A) 10 percent. B) -2.5 percent. C) 2.5 percent. D) 7.5 percent. E) 2 percent.
Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) If the firm does not exit the industry in the long run its demand curve will shift to the right. B) The firm could exit the industry in the long run. C) If the firm remains in the industry in the long run it will break even. D) If the firm does not exit the industry in the long run its demand curve will shift to the left.