If a firm is producing the level of output at which short-run average cost equals long-run average cost, then
A. the firm has chosen the cost-minimizing combination of inputs to produce this level of output.
B. the firm has chosen the profit-maximizing level of output.
C. with a fixed amount of capital, short-run average cost is greater than long-run average cost at any other level of output.
D. both a and b
E. all of the above
Answer: D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Everything else held constant, if a central bank makes an unsterilized purchase of foreign assets, then the domestic money supply will ________ and the domestic currency will ________
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate
According to economists, which of the following factors can increase the economic benefits of specialization and exchange between two trading partners?
a. the use of tariffs and import quotas b. a greater difference in opportunity costs c. a closer alignment in political systems d. shared cultural values relating to work
Participating nations in the 2015 Paris Agreement on Climate Change agreed to reduce overall greenhouse gases emission through 2050 to
A. as much as 80 percent below the levels in the 2015. B. to yield a net increase in the global temperature of no more than 2.7 degrees Fahrenheit by 2050. C. to yield a net increase in the global temperature of no more than 2.7 degrees Fahrenheit by 2025. D. as much as 20 percent below the levels in 2015.