Within the framework of the AD/AS model, in the long run, output
a. will exceed the economy's long-run capacity.
b. will be less than the economy's long-run capacity.
c. will converge toward the economy's long-run capacity.
d. must equal approximately 95 percent of the economy's long-run capacity.
C
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If a country experiences a real GDP growth rate of 1 percent and population growth of 2 percent, then the growth rate of real GDP per person is
A) 3 percent. B) 2 percent. C) 1 percent. D) -1 percent. E) 0 percent.
The key assumption underlying the theory of the firm is that:
A) firms are assumed to maximize sales revenue. B) managers are assumed to maximize the number of employees in their department. C) firms are assumed to maximize profits. D) none of the above
Whenever a nation has substantial external debts and assets denominated in foreign currency:
A) it is easier to manage, since changes in value are often offsetting. B) there can be large and destabilizing wealth effects. C) its interest payments on the debt will be matched by interest earnings on the assets. D) the risk of default becomes very large.
Are consumer surplus and equilibrium price directly or inversely related? Explain your answer
Please provide the best answer for the statement.