Diminishing marginal returns occurs:
A. only in the short run.
B. both in the short run and the long run.
C. only in the long run.
D. only in time periods that are neither long run nor short run.
Answer: A
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The determinants of price elasticity of demand include:
A. availability of substitutes, cost relative to benefit, and scope of market. B. degree of necessity, cost relative to income, scope of market, and adjustment time. C. availability of complements, cost relative to income, and scope of market. D. cost relative to income, scope of demand, and adjustment time.
Which of the following statements is correct?
A. The actual reserves of a commercial bank equal its excess reserves minus its required
reserves.
B. A bank's liabilities plus its net worth equal its assets.
C. When borrowers repay bank loans, the supply of money increases.
D. A single commercial bank can safely lend a multiple amount of its excess reserves.
The following is budget information for a hypothetical economy. All data are in billions of dollars.YearGovernment SpendingTax RevenuesGDP1$1,100$1,000$10,00021,2501,40010,20031,4501,45010,50041,6001,50010,90051,8001,55011,200Refer to the above data. What year is the budget deficit $250 billion?
A. Year 2 B. Year 5 C. Year 3 D. Year 4
Monopolistically competitive firms use advertising exclusively to inform customers about the real differences between their products and their competitors' products.
Answer the following statement true (T) or false (F)