When there are economies of scale, larger and fewer firms bring cost efficiencies even as they reduce price competition.
Answer the following statement true (T) or false (F)
True
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The sum of all planned expenditures for the entire economy at each possible price level is
A) aggregate demand. B) effective demand. C) aggregate supply. D) actual expenditures by consumers.
Equilibrium GDP will not exist where output exceeds aggregate demand because businesses will notice that
a. their profits are positive. b. inventory stocks are building up. c. inventory stocks are being depleted. d. their level of depreciation is rising.
Which of the following models emphasizes the importance of credible, predictable government policies for maintaining full employment with low inflation?
A. the monetarist model B. the Keynesian model C. the supply-side model D. the rational expectations model
Which one of the following would be most compatible with the goals of the government to both improve economic growth and reduce the trade deficit?
What will be an ideal response?