Which of the following is most likely to cause the long-run aggregate supply curve to shift rightward?
a. A rise in energy prices
b. A drop in the actual price level
c. An increase in the demand for leisure hours
d. An increase in the level of investment spending that is less than the depreciation of the capital stock
e. A technological breakthrough with widespread practical applications
e
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When price is greater than average variable cost but less than average total cost at the profit-maximizing level of output, a firm should:
A) continue to produce the level of output at which marginal revenue equals marginal cost. B) increase output to minimize its losses. C) reduce output to the level at which price equals average variable cost to minimize its losses. D) shutdown to minimize its losses.
Assume that the Paris First National Bank is a thriving bank with deposits of $20 million. If the required reserve ratio is 20 percent and the bank is fully loaned out, the bank will have outstanding loans totaling:
a. $2 million. b. $4 million. c. $10 million. d. $16 million. e. $20 million.
Solvency is having:
A. sufficient assets to cover long-run liabilities. B. assets that can be readily converted into cash. C. liabilities that can be readily converted into cash. D. sufficient liabilities to cover long-run assets.
Studies of Import-Substituting Industrialization (ISI) and related policies show that income growth is
A. works best if there is a single national-champion firm in each industry. B. negatively correlated with outward-oriented policies that are closer to free trade. C. not correlated with either free trade or antitrade policies. D. negatively correlated with antitrade policies like ISI.