When there is an inflationary gap there is
A. too much spending and taxes should be raised.
B. too much spending and taxes should be lowered.
C. too little spending and taxes should be raised.
D. too little spending and taxes should be lowered.
A. too much spending and taxes should be raised.
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If the price of Pepsi increases, then there will be ___ of Pepsi.
a. An increase in the quantity demanded b. a decrease in the quantity demanded c. a decrease in the demand d. an increase in the demand
People often make economic decisions they later regret, which shows
A) they failed to acquire additional information up to the point where expected marginal benefit equals expected marginal cost. B) they failed to behave rationally. C) they failed to invest as much as they ought to have invested in information. D) none of the above.
Suppose that, in the long run, a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. What is the efficient scale of production?
A. 5 gallons per day B. 100 gallons per day C. 20 gallons per day D. 50 gallons per day
A decrease in Americans' preference for foreign goods will lead to the following in the foreign exchange market:
A. an increase in the demand for dollars. B. a depreciation of the dollar relative to foreign currencies. C. a movement down the demand curve for dollars. D. a decrease in the supply of dollars.