The level of output at which all economies of scale have been exhausted is known as
A) constant returns to scale. B) optimal economic size.
C) minimum efficient scale. D) the economically efficient output level.
C
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When the price of only one good rises, the relative price of that good
A) falls. B) rises. C) does not change. D) rises if it is a normal good and falls if it is an inferior good.
An efficient economy would set the marginal product in the traditional sector
A) lower than that in the modern non-traditional sector. B) higher than that in the modern sophisticated sector. C) equal to that in the modern sophisticated sector. D) lower in the relatively capital intensive sector. E) higher in the relatively capital intensive sector.
The standard IS curve is adjusted in new Keynesian theory to account for ________
A) the forward-looking behavior of households and firms B) the difference between real and nominal variables C) changes in GDP, or Gross Domestic Product D) the impact of a rising national debt
Due to a recession in the US, the average rate of return on investments is likely to fall causing the US dollar to
a. Appreciate b. Depreciate c. Not change in value d. None of the above