If total spending is greater than the value of output, firms will
A. cut prices.
B. decrease production levels.
C. tend to raise prices.
D. see inventories rise.
Answer: C
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The dollar will depreciate against the euro when the European Central Bank raises interest rates
Indicate whether the statement is true or false
If a large increase in the wage rate leads to a net increase in the use of capital by a firm, then
A. the substitution effect outweighed the output effect. B. the output effect outweighed the substitution effect. C. the substitution and output effects are equal. D. there is no way to estimate the relative size of the substitution and output effect.
A profit-maximizing competitive firm wants to _____ the rate of output when price _____ marginal cost.
A.) Expand; exceeds B.) Reduce; exceeds C.) Expand; is less than D.) Reduce; equals
Central bank independence refers to the central bank’s ability to make decisions without political interference.
Answer the following statement true (T) or false (F)