When long-run average total cost increases as output increases, a firm experiences
a. diseconomies of scale
b. economies of scale
c. constant returns to scale
d. decreasing marginal cost
e. greater total cost in the long run than in the short run
A
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
The intertemporal tradeoff between present and future consumption is measured by the
A) real interest rate. B) inflation rate. C) nominal interest rate. D) terms of trade. E) rate of economic growth.
The presence of discouraged workers may cause:
a. the employment rate to be overstated. b. the employment rate to be understated. c. the unemployment rate to be overstated. d. the unemployment rate to be understated. e. GDP to be too large.
Suppose that a German citizen crosses the border each day to work in Switzerland. Her income from this job would be counted in:
a. Swiss GNP and German GNP. b. Swiss GNP and German GDP. c. Swiss GDP and German GNP. d. Swiss GDP and German GDP.