Firms are more likely to devote resources to research and development when
A. they expect to earn rewards from successful research and development.
B. the country has been experiencing slow economic growth in order to spur economic growth.
C. it is easy to copy new techniques of other firms.
D. the country is in recession.
Answer: A
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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.
In Econland autonomous consumption equals 200, the marginal propensity to consume equals 0.9, net taxes are fixed at 100, investment is fixed at 200, government purchases are fixed at 300, and net exports are fixed at 50. Short-run equilibrium output in this economy equals:
A. 6600 B. 850 C. 7500 D. 5000
Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?
a. Infrastructure. b. Political stability. c. Agricultural sector. d. Traditional values. e. Poverty.
For a firm in a perfectly competitive market, if it is producing at a level of output where marginal costs are equal to marginal revenue it:
A. is producing a profit-maximizing quantity. B. should cut back production to increase profits. C. should increase production to increase profits. D. is impossible to tell how quantity should be changed without more information.