Average cost of production is
a. Total variable cost divided by total units produced
b. Equal to marginal cost
c. Total fixed cost divided by total units produced
d. Total cost divided by total units produced
d
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According to classical economists, a decrease in the rate of interest will
A) increase unemployment. B) increase consumer saving. C) increase business investment. D) increase business failures.
"Government failure" is present when
a. constitutional restrictions block government action that is favored by the majority of voters. b. political decision-makers try to serve the general public rather than their personal interest. c. the structure of incentives encourages political decision-makers to undertake actions that conflict with the efficient allocation of resources. d. the political decision-makers are motivated by something other than good intentions; if they have good intentions, political action will allocate resources efficiently.
For the European Central Bank (ECB), the equivalent of the FOMC's target federal funds rate is the:
A. London Inter-Bank Offer Rate. B. European target discount rate. C. European target federal funds rate. D. target refinancing rate.
If the government increased its purchases of goods and services by $12,000, and this resulted in an eventual increase in GDP and income of $60,000, the MPS would be equal to:
A. 0.2. B. 0.4. C. 0.8. D. 2.