"Mediocre economists often consider only the immediate direct effects of a change, whereas a good economist will also consider indirect effects that may only become observable over time." This statement most clearly emphasizes
What will be an ideal response?
the importance of secondary effects.
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Saving equals ________
A. income minus consumption expenditure minus net taxes B. income minus net taxes C. total income minus total expenditure D. net taxes minus government expenditure
Which of the following are characteristic of a developing country?
A) extensive embrace of free trade policies B) low inflation C) high national savings D) a current account deficit and low national savings E) strong credit institutions
A leading variable ________
A) reaches a peak or trough before the turning point of the business cycle B) reaches a peak or trough after the turning point of the business cycle C) reaches a peak or trough at the same time as the turning point of the business cycle D) all of the above E) none of the above
Answer the following statements true (T) or false (F)
1. When average costs are increasing, marginal costs are greater than average costs. 2. If a firm increases all its inputs by 10 percent and its output increases by 15 percent, the firm is experiencing diseconomies of scale. 3. A major factor explaining economies of scale is increased specialization of labor. 4. Diseconomies of scale are caused by the law of diminishing marginal returns. 5. If a firm doubles its resource inputs and as a result output triples, then the long-run average cost curve must be upward-sloping.