Downward sloping long-run supply curves occur in markets
A) with learning-by-doing.
B) with increasing returns to scale.
C) with constant returns to scale.
D) Either A or B
D
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When output is below potential and the policy rate has hit the floor of zero, if policymakers do nothing, output will ________ and inflation will ________
A) rise; fall B) fall; fall C) fall; rise D) rise; rise
Financial institutions that cut back on their lending are engaged in ________
A) liability management B) deleveraging C) financial innovation D) torsion control
Many economists believe that a nationalized firm tends to be inefficient because
a. it sets P = MC b. it makes economic profits c. tax revenues cannot be used to subsidize the firm d. managers have strong incentives to excel e. the government cannot go bankrupt
Economies of scale suggests that as the level of production:
a. decreases, the average cost of producing each individual unit increases. b. increases, the average cost of producing each individual unit increases. c. decreases, the average cost of producing each individual unit declines. d. increases, the average cost of producing each individual unit declines.