A firm finds that producing 30,000 vases costs $180,000 and producing 40,000 vases costs $200,000. This pattern might be explained by:
A. diminishing marginal productivity.
B. economies of scope.
C. economies of scale.
D. diseconomies of scale.
Answer: C
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The aggregate demand curve is downward sloping for all of the following reasons EXCEPT for the:
A. effect of inflation on the value of money. B. impact of inflation on the consumer price index (CPI). C. response of the Fed to inflation through its policy reaction function. D. distributional impact of inflation on spending.
In the short run, when the Fed increases the federal funds rate,
A) the real interest rate rises and investment does not change. B) the real interest rate is unaffected but investment still decreases. C) the real interest rate rises and investment decreases. D) there is no effect on investment because investment depends on the real interest rate. E) the real interest rate falls and investment increases.
The Federal Reserve has had the authority to vary reserve requirements since the
A) 1920s. B) 1930s. C) 1940s. D) 1950s.
When a nation totally bans trade with another country, it is imposing a(n):
a. tariff. b. embargo. c. quota. d. none of these.