A monopoly shuts down when
A) the short run price is below its average variable costs.
B) the long run price is below its average variable costs.
C) the average cost is less than price.
D) never, because it can raise its prices as high as necessary to keep operating and maximize profits.
A
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An example of a real flow in the circular flow diagram is
A) a household's supply of work effort at its new business. B) Nike's payment of wages to workers in China. C) your county's collection of property taxes. D) the government's payment of wages to a soldier. E) a teacher's salary at the local high school.
Fill in the blank: ________ leads to speculation
A) Love B) Uncertainty C) Greed D) Money E) Sin
Suppose the government decided to ease monetary policy, then increase taxes. In the short run in the Keynesian model, the effect of these policies would be to ________ the real interest rate and ________ the level of output
A) lower; increase B) lower; decrease C) lower; have an ambiguous effect on D) have an ambiguous effect on; increase
Research on the effects of recessions on the real level of GDP shows that
A) recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase. B) recessions cause large, permanent reductions in the real level of GDP. C) recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary. D) recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.