An economy could produce above its potential GDP for a short period of time by
A. reducing the size of the labor force.
B. increasing the price of final goods and services.
C. adding extra shifts of work, such as overtime or night shifts.
D. increasing the money supply.
Answer: C
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When the price level increases people:
A. feel less wealthy. B. feel more wealthy. C. have the same real value of assets, regardless of the change in the price level. D. experience a bubble forming in the economy overall.
Constant returns to scale occur when the firm's long-run
a. total costs are constant as output increases. b. average total costs are constant as output increases. c. average cost curve is falling as output increases. d. average cost curve is rising as output increases.
If Nepal is a net importer of computers, free trade will hurt the
A. poor citizens of Nepal. B. domestic producers of computers. C. rich citizens of Nepal. D. domestic consumers of computers.
Refer to the information provided in Figure 5.4 below to answer the question(s) that follow.
Figure 5.4Refer to Figure 5.4. Along the given demand curve, which of the following is true?
A. Since the demand curve is linear, the price elasticity of demand between each of the points is the same. B. Demand is less elastic along the segment EF than the segment AB. C. Demand is less elastic along the segment AB than the segment EF. D. All of the above are true.