Which of the following is most important for the successful functioning of any economy?
A) Clearly understood and generally accepted rules.
B) Common and reasonably specific goals for people to pursue.
C) Greed.
D) Low taxes relative to income.
E) Sufficient purchasing power to buy all of an economy's goods and services.
A
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If firms receive an economic forecast predicting future increases in the growth of real GDP, they are likely to respond by
A) increasing their level of investment spending to increase future production capacity. B) decreasing their level of investment spending to decrease current production capacity. C) increasing their level of investment spending to increase current production capacity. D) decreasing their level of investment spending to decrease future production capacity.
It is harder to explain the behavior of firms in oligopoly than in other market structures because in oligopoly
a. the firms act independently of each other b. firms base their decisions on what their rivals do c. only differentiated products are produced d. only homogeneous products are produced e. the demand curve can slope upward
If wages are sticky, then a greater than expected increase in the price level
a. raises the real costs of production, so the short-run aggregate supply curve shifts left. b. raises the real costs of production, so the aggregate quantity of goods and services declines. c. reduces the real costs of production, so the short-run aggregate supply curve shifts right. d. reduces the real costs of production, so the aggregate quantity of goods and services rises.
On a straight line demand curve, total revenue is the same at every point on the demand curve.
Answer the following statement true (T) or false (F)