Which of the following will always be true when an economy is in long-run equilibrium?
a. The level of prices will be constant (that is, inflation will be zero).
b. Actual output will exceed the potential output.
c. The actual rate of unemployment will be less than the natural rate of unemployment.
d. The output of the economy will correspond with the full-employment output.
D
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Which of the following goods might, under the right circumstances, be substitutes for love?
A) Power B) Wealth C) Notoriety D) All of the above. E) Trick question: there are no substitutes for love.
To reach an economically efficient output level, the size of an excise tax imposed on a firm generating a negative externality should be:
a. the firm's marginal cost. b. the social marginal cost. c. the difference between the social marginal cost and the firm's marginal cost. d. the sum of the social marginal cost and the firm's marginal cost.
Suppose there is a reduction in cash flow. This suggests that
A) firms have decreased their expectations of future profits. B) the real interest rate has increased. C) the rate of depreciation has increased. D) current profits have decreased. E) all of the above
Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore newspapers to ________.
A. supply; increase B. supply; decrease C. quantity supplied; decrease D. quantity supplied; increase