In an increasing-cost industry, an increase in output will lead to
A. an downward shift in the MC curve.
B. an increase in long-run per-unit costs.
C. an downward shift in the ATC curve.
D. a reduction in long-run per-unit costs.
Answer: B
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An example of an international policy externality is
A) the locomotive effect. B) the liquidity effect. C) the monetary effect. D) sterilization.
One of the difficulties in using discretionary fiscal policy effectively is that the legislative decision-making process is sometimes very long and drawn out
a. True b. False Indicate whether the statement is true or false
Because a change in consumer spending is positively related to a change in income, the slope of the aggregate demand function is:
a. 0. b. 1. c. equal to the MPC. d. equal to the marginal propensity to save.
Which of the following would cause the demand for loanable funds to increase?
a) A reduction in consumer confidence that causes people to save more. b) A new investment tax credit for businesses to expand. c) A major sporting event in town that causes people to withdrawl money from their bank accounts. d) A reduction in government spending.