Suppose investment spending is not very sensitive to the interest rate. Given this information, we know that
A) the IS curve should be relatively flat.
B) the IS curve should be relatively steep.
C) the LM curve should be relatively flat.
D) the LM curve should be relatively steep.
E) neither the IS nor the LM curve will be affected.
B
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The above figure shows a nation's production function. Point B is ________ and ________ because ________
A) unattainable; inefficient; the nation is using resources efficiently but they could be more efficient B) unattainable; inefficient; the nation is using resources inefficiently C) attainable; inefficient; the nation is using resources inefficiently D) unattainable; efficient; the nation would be using resources efficiently if they could attain this level of production E) attainable; efficient; the nation is using resources efficiently
When a firm's demand fluctuates randomly,
A) no profit can be earned on the inventory. B) the optimal inventory maximizes the profit of the inventory. C) the profit-maximizing inventory is found where the expected marginal benefit exceeds the expected marginal cost. D) managers cannot use marginal analysis to determine the optimal inventory.
Governments choose to mandate participation in a program, like auto insurance, when:
A. the functioning of those markets is thought to be in the public interest. B. the market would not otherwise exist. C. the market would exist illegally. D. None of these statements is true.
A firm's opportunity costs of using resources provided by the firm's owners are called
a. sunk costs b. fixed costs c. explicit costs d. implicit costs e. entrepreneurial costs