Fixed cost is:
A. the cost of producing one more unit of capital, for example, machinery.
B. any cost that does not change when the firm changes its output.
C. average cost multiplied by the firm's output.
D. usually zero in the short run.
Answer: B
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The price tag on a pair of Nike shoes illustrates how money performs the function of a
A) standard of deferred payment. B) store of value. C) unit of accounting. D) medium of exchange.
The long-run supply curve for a firm in a perfectly competitive industry is:
A) negatively sloped. B) positively sloped. C) vertical. D) horizontal.
What are the components of the trilemma that is encountered when a country chooses its monetary policy and what is the meaning of the term?
What will be an ideal response?
Assuming imperfect capital mobility and a fixed exchange rate, then an expansionary monetary policy
a. results in a balance of payments surplus without a conflict between domestic goals and external balance. b. results in a balance of payments deficit with a potential conflict between domestic goals and external balance. c. will shift the LM curve to the left. d. will have no effect on the balance of payments.