What resources can a firm change in the short run? In the long run?
What will be an ideal response?
In the short run, the firm can change its variable inputs. These would be inputs such as labor. The firm cannot change its fixed inputs, such as its capital stock. The inputs the firm cannot change are called its plant. In the long run, the firm can change all of its inputs. Indeed, the long run is defined as the period of time long enough so that the firm can change all of its inputs.
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The major cause of the recession in 2001 was a decline in _____________ spending.
Fill in the blank(s) with the appropriate word(s).
Which of the following would be most likely to cause an increase in current aggregate demand in the United States?
a. increased fear that the U.S. economy was going into a recession b. an increase in the real interest rate c. a reduction in the expected rate of inflation d. rapid growth of real income in Canada and Western Europe
There were large decreases in productivity during
A. the 1990s and early 2000s. B. the late 1980s. C. the late 1970s and the 2010s. D. the 1950s and 1960s.
The latest Taylor Swift album is available to be downloaded for $18.99. Is this price a rationing device?
A) No, the album will be sold to anyone having the required number of dollars. B) Yes, because the album will only be purchased by people who are willing and able to pay $18.99. C) No, for price to be a rationing device, it must be so high that only one unit of the item is sold. D) Yes, since that is a reasonable price.