Keynesians believe that the difference between using an increase in the money supply compared with an increase in government spending to increase aggregate demand in the event of a recession is that if government spending is increased, ________ will
be ________ than if the money supply is increased. A) real interest rate; higher
B) real interest rate; lower
C) the price level; lower
D) the price level; higher
A
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"For a perfectly competitive market, an economic profit attracts new firms. But when these firms enter the market, the price falls and the economic profit is eliminated"
Are the previous statements correct or incorrect? What is the long-run profit or loss outcome for firms in a perfectly competitive market?
A company finds that at the output level at which marginal cost equals marginal revenue, TC = $500, TVC = $400, and TR = $450. Your advice to the firm is
A) shut down, as TC > TR. B) reduce output to reduce the cost of production. C) increase output to reduce the per unit cost of production. D) continue to produce because loss is less than TFC.
The equation of exchange states that:
a. money supply multiplied by real output equals velocity. b. velocity multiplied by money supply equals the selling price times the quantity of actual output. c. money supply divided by velocity equals nominal GDP. d. money supply divided by velocity equals real GDP.
Production possibilities in an economy decrease as more resources and better technology are utilized.
Answer the following statement true (T) or false (F)