Military spending is a good example of an automatic stabilizer
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose you are the manager of Big Boards, a firm that produces particle board. To make your particle board, you purchase sawdust from timber farms. During the process of harvesting timber, both lumber and sawdust are produced. If the demand for lumber increases, this will cause the production of sawdust to ________ and the price of sawdust to ________.
A) decrease; fall B) increase; fall C) increase; rise D) decrease; rise
Which of the following is true for a firm operating under perfect competition, monopolistic competition, and monopoly?
a. Firms earn positive economic profits in the long run. b. Firms earn zero economic profits in the long run. c. Profits are maximized when marginal cost equals marginal revenue. d. Price equals marginal cost.
Suppose the United States unexpectedly decided to pay off its debt by printing new money. Which of the following would happen?
a. People who held money would feel poorer. b. Prices would rise. c. People who had lent money at a fixed interest rate would feel poorer. d. All of the above are correct.
Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the taste for a good?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figure 4