Which of the following distinctions does not help to explain the difference between relevant and irrelevant cost?
A) historical vs. replacement cost
B) sunk vs. incremental cost
C) variable vs. fixed cost
D) out-of-pocket vs. opportunity cost
E) All help to explain the difference.
D
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A downward shift of the planned expenditure curve resulting from an increase in the price level corresponds to
A) a movement up along the aggregate demand curve. B) a movement down along the aggregate demand curve. C) an increase in aggregate demand. D) a decrease in aggregate demand.
In monopolistic competition, profit is maximized by producing so that marginal revenue
A) equals price. B) is negative. C) equals marginal cost and which are less than price. D) equals average total cost but not marginal cost. E) equals marginal cost and equals price.
A system where goods and services are exchanged directly without a common unit of account is called the:
A) commodity system. B) fiat system. C) barter system. D) none of the above.
Of these policies, which is the best example of constrained discretion?
A) the annual federal budget deficit shall not exceed three percent of the GDP B) the growth rate of the money supply shall be between two percent and five percent C) macroeconomic policies shall promote rapid economic growth and low inflation D) macroeconomic policies shall aim to keep inflation — on average over each five-year interval — within a range of two percent to four percent