Which of the following is NOT correct for a perfectly competitive firm in long-run equilibrium?
A. MC = MR > LAC
B. SAC = LAC
C. LAC = P
D. MR = P = AR
Answer: A
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Why does the money supply increase when the Fed buys a bond but does not change when a business buys a bond?
What will be an ideal response?
Which of the following is a Keynesian approach for dealing with a recession?
A. Raise taxes. B. Raise interest rates. C. Increase supply incentives for producers. D. Increase government expenditure.
Technology is
A. computers and lasers. B. society's pool of knowledge of how to produce goods and services. C. not obtainable by engaging in activities that increase human capital. D. a resource like land or physical capital.