Suppose the Congress enacts a 5 percent decrease in annual military expenditures. Other things equal, this can be associated with:
a. a change in the slope of the aggregate demand curve.
b. a leftward shift of the aggregate demand curve.
c. a rightward shift of the aggregate demand curve.
d. a movement down along the aggregate demand curve.
e. a movement up along the aggregate demand curve.
b
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MFP growth represented by a will be higher than the growth of labor productivity if
A) k > n. B) k < n. C) k = n. D) None of the above. The relative size of k and n do not affect MFP growth.
Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,
a. Belarus should export linen to Russia. b. Russia should export linen to Belarus. c. trading linen would provide no net advantage to either country. d. Without additional information about opportunity costs, this question cannot be answered.
Where along the long-run average total cost curve will an efficient firm try to produce in the long run?
a. Along the downward-sloping portion when there are economies of scale because cost per unit of output is decreasing at that level of production. b. Along the upward-sloping portion when there are diseconomies of scale because a firm will sell more output at that level of production. c. When there are constant returns to scale because this is the minimum efficient level of production, and cost per unit of output is at its lowest.
A perfectly competitive firm's marginal revenue exceeds its marginal cost at its current output. To increase its profit, the firm will
A) lower its price. B) raise its price. C) decrease its output. D) increase its output.