Average variable cost equals:
A. total fixed cost plus total variable cost.
B. average total cost minus average fixed cost.
C. average total cost plus average fixed cost.
D. total cost minus average cost.
Answer: B
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As shown in Figure 7-4, for income to be unchanged when there is an autonomous decline in investment, the interest rate would have to
a. rise to r0. b. fall to r2. c. remain constant at r1. d. None of the above
If price elasticity of demand is -0.5,
a. a 1% decrease in quantity demanded leads to a 0.5% decrease in price b. a 1% decrease in price leads to a 0.5% increase in quantity demanded c. a 50% decrease in price leads to a 1% increase in quantity demanded d. a 50% decrease in price leads to a 100% increase in quantity demanded e. demand is elastic
The real interest rate is:
A. the everyday notion of the interest rate. B. adjusted for inflation. C. the amount of interest the bank pays you for saving or charges you for borrowing. D. the actual average interest rate in the economy.
Despite the monetary expansion of the 1992-2000 period, the inflation rate
a. rose due to adverse supply shocks. b. rose due to large increases in aggregate demand. c. fell despite adverse supply shocks. d. fell due to favorable supply shocks.