What is meant by price efficiency?
A. Price is equal to marginal cost.
B. Price is greater than average total cost.
C. Price is greater than marginal cost.
D. Price is equal to average total cost.
Answer: A
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Suppose the government cracks down on illegal immigration. How will this affect the demand and supply of labor
What will be an ideal response?
The higher the expected rate of inflation,
A) the lower is the nominal rate of interest. B) the higher is the real rate of interest. C) the higher is the nominal rate of interest. D) the higher the real and nominal rates of interest.
Based on economic criteria, a nation should choose a fixed exchange rate if:
A) the monetary authorities are capable of handling shocks. B) the net benefits of fixing versus floating are positive. C) the net benefits of fixing versus floating are negative. D) there is a liberal political agenda that restricts government authority over capital flows.
When the economy is operating at a point where aggregate demand equals short-run aggregate supply, it must be true that:
A. the short-run level of output is not the same as long-run potential output. B. aggregate demand also equals long-run aggregate supply. C. prices are higher than expected prices. D. None of these must be true.