Which of the following will most likely occur in the United States as the result of an unexpected rapid growth in real income in Canada and Mexico?
a. an increase in aggregate demand and output in the short run
b. an reduction in aggregate demand and output in the short run
c. a reduction in the price level
d. a decrease in the natural rate of unemployment in the United States
A
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What is the difference between real and nominal GDP, and why do economists make this distinction?
What will be an ideal response?
A perfectly competitive firm produces in a market where the prevailing price is $25 . At its current output level of 10,000 units, its average total cost equals $15 . The firm is earning
a. a total money profit of $100,000 b. a total economic profit of $100,000 c. a total money profit of $250,000 d. a total economic profit of $250,000 e. both a total money profit and a total economic profit of $100,000
Firms in perfectly competitive markets who wish to maximize profits ought to produce:
A. where total profit is the greatest. B. at capacity and plan to expand in the long run. C. where marginal revenue equals market price. D. as many units as their scale allows.
All else equal, when people become more optimistic about a company's future, the
a. supply of the stock and the price will both rise. b. supply of the stock and the price will both fall. c. demand for the stock and the price will both rise. d. demand for the stock and the price will both fall.