The more significant are economies of scale in an industry, the more product variety will be observed.
Answer the following statement true (T) or false (F)
False
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During the contraction phase of the business cycle
a. employment and output are both rising b. employment and output are both at a peak c. employment and output are both at their lowest d. employment and output are both falling e. employment is falling and output is rising
People living in the town of Norwich, England, have begun a system of trade called the LETS, which allows people to enter into exchanges without using the British pound. Members offer a particular service, such as babysitting, gardening, and plumbing for which they get Croy credits. They can then use these Croys to buy services from other people. Does this system represent what economists call barter?
A. No, to be true barter, the exchange rate between the Croy and the British pound must be flexible. B. Yes, because the Croy is not real money but just a bookkeeping account. C. Yes, because it does not use the true money, the British pound. D. No, this group has merely replaced one money, the pound, with a less flexible medium of exchange that they call the Croy.
When the rate of appreciation of the nominal exchange rate equals the foreign inflation rate minus the domestic inflation rate, we say there is
A. purchasing power parity. B. an aggregate supply shock. C. a Phillips curve. D. relative purchasing power parity.
Country B is a closed economy with no government and a fixed aggregate price level. There are only two sources of aggregate demand, consumer spending and investment spending. In country B, we have that aggregate disposable income Yd, equals GDP. b. Suppose you are told that the aggregate consumption function is C=500+0.5Yd, and the planned investment, IPlanned, is 100. What is the MPC? What is the slope and y-intercept of the AEPlanned curve ?
What will be an ideal response?