Total fixed costs decrease as output expands
a. True
b. False
B
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Explain why economies with financial account surpluses usually have current account deficits
What will be an ideal response?
In a competitive industry buffeted by demand and supply shocks, prices increase and decrease, but economic profits tend to revert to zero. Hence, profits are exhibiting
a. Above-average return b. Positive earnings c. Mean reversion d. None of the above
An increase in money supply causes the real interest rate to ________ and output to ________ in the short run, before prices adjust to restore equilibrium.
A. rise; rise B. rise; fall C. fall; rise D. fall; fall
A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits. It is currently operating in the elastic range of its MRP curve. If the wage rate increases, its total spending on wages at the new equilibrium will:
A. Be larger B. Be smaller C. Be unchanged D. Change in an undetermined direction