The term "fixed cost" refers to the cost a firm incurs to produce a specific fixed quantity of output
Indicate whether the statement is true or false
FALSE
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If the CPI for this year is 220 and the CPI for last year was 215, the inflation rate is
A) just over 2 percent. B) 5 percent. C) just over 5 percent. D) 10 percent.
Under which of the following scenarios is it most likely that monopoly power will be exhibited by firms?
A) When there are few firms in the market and the demand curve faced by each firm is relatively inelastic. B) When there are many firms in the market and the demand curve faced by each firm is relatively inelastic. C) When there are few firms in the market and the demand curve faced by each firm is relatively elastic. D) When there are many firms in the market and the demand curve faced by each firm is relatively elastic.
The implicit cost incurred by a firm to use its resources to produce its output is the firm's
A) total cost. B) explicit cost. C) opportunity cost. D) accounting cost.
Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The economy is at point Y on the investment demand curve. Given these conditions, what policy should the Fed pursue to achieve a noninflationary, full-employment level of real GDP?
A. Increase aggregate demand from AD3 to AD2. B. Increase interest rates from 4% to 8%. C. Decrease the money supply from $225 billion to $150 billion. D. Make no change in monetary policy.