For a natural monopoly, long-run average costs
A) fall as output increases.
B) rise as output increases.
C) fall as output falls.
D) rise as output falls.
Answer: A
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If nominal wages are downwardly rigid, a countercyclical policy during a recession leads to ________
A) a fall in consumption B) an increase in tax rates C) an increase in employment D) a fall in investment
Refer to Figure 5-1. At the market equilibrium, the deadweight loss is equal to
A) $0. B) $500,000. C) $1,000,000. D) $2,000,000.
Which of the following best describes a typical business cycle?
A) Economic expansions are followed by economic contractions. B) Inflation is followed by unemployment. C) Trade surpluses are followed by trade deficits. D) Stagflation is followed by inflationary economic growth.
The gross domestic product (GDP) of a country measures the _____
a. market value of all intermediate goods and services produced by resources located within the country b. market value of all goods and services produced by resources located outside the country c. market value of all final goods and services produced by resources located within the country d. value added to the economy by intermediate goods and services minus original cost e. value of the total sales of financial assets