A common error of business managers is to blame inflation on
A. consumer spending.
B. rising wages.
C. rising prices.
D. rising interest rates.
E. rising unemployment.
Answer: B
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Answer the following statements true (T) or false (F)
1. The biggest disadvantage of a sole proprietorship is the lack of distinction between the business and the owner. 2. In a partnership, each partner’s liability is limited to his or her contribution to the partnership. 3. The board of directors has unlimited financial liability for the debts of the corporation. 4. A corporation can raise money by selling stock or bonds.
The profit-maximizing decision for the monopoly is:
A. to choose the quantity where marginal cost equals marginal revenue. B. the same as that of the perfectly competitive firm. C. to choose price according to demand. D. All of these statements are true.
During the industrial revolution, the United States saw increases in the demand for labor and increases in the supply of labor. The increase in real wages rose during this period is consistent with which of the following statements?
A. The rightward shift in the labor demand curve was greater than the rightward shift of the labor supply curve. B. The rightward shift in the labor supply curve was greater than the rightward shift of the labor demand curve. C. The rightward shift in the labor demand curve was greater than the leftward shift of the labor supply curve. D. The leftward shift in the labor supply curve was greater than the rightward shift of the labor demand curve.