While working under uncertain conditions, it is better to
a. Maximize total profits
b. Minimize error costs
c. Maximize error costs
d. Minimize profits
b
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If aggregate expenditure is less than GDP, how will the economy reach macroeconomic equilibrium?
a. Inventories will decline, and GDP and employment will decline. b. Inventories will rise, and GDP and employment will decline. c. Inventories will decline, and GDP and employment will rise. d. Inventories will rise, and GDP and employment will rise.
In developed industries, the interest rate tends to be lower than in newer industries. What could explain this?
A) greater demand for loans in the developed industry B) greater supply for loans in the new industry C) greater demand for loans in the new industry D) lower supply for loans in the developed industry
Two firms, each producing different goods, can achieve a greater output than one firm producing both goods with the same inputs. We can conclude that the production process involves
A) diseconomies of scope. B) economies of scale. C) decreasing returns to scale. D) increasing returns to scale.
An unstable inflation rate
a. always redistributes real income from lenders to borrowers. b. always redistributes real income from borrowers to lenders. c. adds to the risk of borrowing and lending and interferes with long-run financial planning. d. makes goods and services too expensive. e. always redistributes real income from taxpayers to the government.