Economies of scale arise from:
A. increasing returns to scale.
B. constant returns to scale.
C. decreasing returns to scale.
D. constant marginal returns to scale.
Answer: A
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The amount of money actually received in a particular period is called:
A. nominal income. B. real income. C. a cost-of-living index. D. consumer surplus.
(Consider This) Some economists believe that modest inflation, say 2-3 percent, might help reduce unemployment during recessions. What is the argument of economists who reject this idea?
A. Consumers would stop buying goods at higher prices, reducing demand, output, and employment. B. Firms will pocket the profits resulting from higher prices and have no incentive to expand output and employment. C. Wages and other costs would rise with the inflation, keeping firms from expanding employment. D. Consumer spending would shift to cheaper imported goods, reducing domestic demand and employment.
When an investor buys a corporate bond
A) the investor becomes part owner of the corporation. B) the principal of the bond is a loan to the corporation. C) the interest made on the bond represents the bondholder's limited liability in the company. D) the face value of the bond is equal to what the investor paid for the bond.
The Congressional Budget Office estimates that most of the increase in federal spending on Medicare and Medicaid will be due to
A) the aging population. B) increases in the cost of providing health care. C) increases in immigration. D) declining income levels.