If the selling price falls and input costs are fixed, profit margins will increase
a. True
b. False
Indicate whether the statement is true or false
False
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Central planners
A) know more than the market. B) know less than the market knows. C) process information more efficiently than the market. D) can predetermine equilibrium prices.
Pollution is a form of market failure called a negative externality
a. True b. False
Government policy can potentially raise economic well-being
a. in all markets for goods and services. b. in economic models, but not in reality. c. when a good does not have a price attached to it. d. never.
The economy is in the horizontal portion of the AS curve, there is no liquidity trap and investment is sensitive to changes in the interest rate. According to the Keynesian transmission mechanism, if the money supply increases the interest rate will __________, investment spending will __________, the AD curve will shift to the __________, and Real GDP will __________
A) fall; rise; right; not change B) fall; rise; left; rise C) rise; rise; right; rise D) fall; rise; right; fall E) fall; fall; left; fall