When per-unit costs increase as output increases, there are economies of scale in production.
Answer the following statement true (T) or false (F)
False
Economies of scale exist when per-unit costs decline as output increases.
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As firms expect future profits to increase, they increase their investment. As a result, real GDP rises above potential GDP. If the Fed followed Friedman's k-percent rule, the Fed would
A) continue allowing the quantity of money to grow at "k" percent. B) increase the quantity of money more than usual. C) decrease the quantity of money. D) raise the federal funds rate. E) lower the federal funds rate.
If M were 900, V were 12, and P were 12, how much would PQ be?
What will be an ideal response?
Are federal budget deficits related to trade deficits?
A. Yes. If U.S. consumers buy too many imported goods they don't have money to save and a budget deficit results. B. Yes, but only if the quality of U.S. goods and services is deteriorating. C. Yes. As deficit spending goes up, it is likely government borrowing will, too. Then foreign residents who lend funds to the U.S. government have less to spend on our goods, so U.S. exports will fall. D. No. The budget deficit is entirely a domestic matter while the trade deficit only affects U.S. citizens who travel abroad.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions. B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions. C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions. D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.