Which of the following resources will a producer demand another unit of so long as the additional unit's marginal revenue exceeds its marginal cost?
a. labor
b. capital
c. natural resources
d. entrepreneurial ability
e. All of the answers are correct.
E
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
What happens if the economy is at its long-run equilibrium and aggregate demand increases?
What will be an ideal response?
How is the impact of expansionary fiscal policy different in an open economy than in a closed economy?
What will be an ideal response?
Nonexcludability causes:
A. people to demand a higher quantity than they would if they had to pay for what they consumed. B. people to demand a lower quantity than they would if they paid for what they consumed. C. firms to supply a lower quantity than they would if they incurred the full costs of the provision of the good. D. firms to supply a higher quantity than they would if they had to pay for what they supplied.