Refer to the above diagram, in which Qf is the full-employment output. A contractionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at:
A. AD0.
B. AD1.
C. AD2.
D. AD3.
Answer: D
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Product differentiation allows a firm to compete with another firm on the basis of
A) efficiency. B) elasticity. C) quality, price, and marketing. D) the level of output and the price. E) demand.
It definitely pays a firm to shut down if the price of its product is
A) below its minimum average variable cost. B) above its maximum variable cost. C) above its minimum average variable cost. D) below its minimum total cost
Consider the following statement, "The Federal Reserve fights recessions by increasing the money supply so people will have more money to spend." What is wrong with the statement and how can it be corrected?
What will be an ideal response?
If the supply of labor to a monopsonist is everywhere unit elastic, and the marginal expenditure equals $1, then the wage will equal
A) $0.50. B) $0.75. C) $1.00. D) $2.00.