If a firm is producing where MR > MC,
A) the revenue gained by producing one more unit of output exceeds the cost incurred by doing so.
B) the revenue gained by producing one more unit of output equals the cost incurred by doing so.
C) the revenue gained by producing one more unit of output is less than the cost incurred by doing so.
D) the firm is already maximizing profits because revenue is being increased by more than costs.
A) the revenue gained by producing one more unit of output exceeds the cost incurred by doing so.
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Refer to the above figure. Suppose that the economy starts at AD1. If the government reduces taxes, then the economy goes to AD2, but then falls back to AD3. This is an example of
A) complete crowding-out effect. B) partial crowding-out effect. C) Ricardian equivalence. D) laissez-faire.
During the Financial Crisis of 2007-2009, banks significantly increased their holdings of excess reserves. What impact did this have on the money multiplier? How would the Fed change the monetary base if it wanted to maintain a stable money supply?
What will be an ideal response?
Which of the following expressions must be equal to national saving for a closed economy?
a. Y - I - G - NX b. Y - C - G c. Y - I - C d. G + C - Y
If saving is less than domestic investment, then
a. there is a trade deficit and Y > C + I + G. b. there is a trade deficit and Y < C + I + G. c. there is a trade surplus and Y > C + I + G. d. there is a trade surplus and Y < C + I + G.