A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5 . The firm can sell the 100th unit for $4.75 . The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
a. True
b. False
Indicate whether the statement is true or false
False
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
If the money supply is $2 trillion and velocity is 5, then nominal GDP is
A) $1 trillion. B) $2 trillion. C) $5 trillion. D) $10 trillion.
Endogenous growth theory is about
A) welfare of indigenous people. B) explaining growth. C) studying education. D) studying fertility choices.
The difference between the simple Keynesian model and the IS-LM curve model is that the latter
a. excludes a money market and interest rates. b. includes a commodity market and flexible income. c. excludes a commodity market and interest rates. d. includes a money market and flexible interest rates.Figure 7-3