The most desirable rate of output for a firm is the output that
A. Maximizes total revenue.
B. Minimizes marginal costs.
C. Maximizes total profit.
D. Minimizes total costs.
Answer: C
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In the long-run equilibrium, perfectly competitive firms produce where
A) marginal cost is minimized. B) average total cost is minimized. C) average revenue is zero. D) All of the above are correct.
A speculator becomes the floating-rate payer in an interest-rate swap. She hopes that
A) long rates rise. B) long rates fall. C) short rates rise. D) short rates fall.
A demand curve for a normal good
A) slopes upward and to the right. B) is constructed based on the assumption that income is rising. C) is constructed based on the assumption that an inverse relationship exists between price and income. D) shows the inverse relationship between price and quantity demanded.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The GDP Price Index rises and nominal value of the domestic currency remains the same. b. The GDP Price Index falls and nominal value of the domestic currency remains the same. c. The GDP Price Index and nominal value of the domestic currency remain the same. d. The GDP Price Index rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.