If leakages are less than injections, equilibrium output will be
A. More than full-employment output, and an inflationary gap will occur.
B. More than full-employment output, and a recessionary gap will occur.
C. Less than full-employment output, and a recessionary gap will occur.
D. Less than full-employment output, and an inflationary gap will occur.
Answer: A
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When there are economies of scale,
A) MC > AC, so cost-output elasticity is greater than AC. B) MC < AC, so cost-output elasticity is less than AC. C) MC < AC, so cost-output elasticity is greater than 1. D) MC < AC, so cost-output elasticity is less than 1. E) long-run marginal cost is declining.
If the price of hot dogs increases, the demand for hot dog buns will
A) increase. B) decrease. C) remain constant. D) shift to the right.
If an inefficient public monopoly cannot provide a service at a price that sufficient numbers of people are willing to pay it:
A. can remain in operation by covering its losses with revenue from taxes. B. must shut down and leave the industry in the long run. C. should expand operations until demand is satisfied. D. will seek out more efficiencies.
What is the Effective Tax Rate?
What will be an ideal response?