The supply curve of a perfectly competitive firm is:
A. the marginal cost curve only if price exceeds average total cost.
B. nonexistent.
C. the average total cost curve only if price exceeds average variable cost.
D. the marginal cost curve only if price exceeds average variable cost.
Answer: D
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If the income-expenditure multiplier equals 4, and a 1 percent increase in the real interest rate reduces autonomous spending by 100 units, then a 1,000 unit recessionary gap can be eliminated by ________ the real interest rate by ________ percent.
A. increasing; 2.5 B. decreasing; 2.5 C. increasing; 10.0 D. increasing; 4.0
The measure of saving in the National Income and Product Accounts includes
A) capital gains on stocks, bonds, houses, and other assets. B) purchases of consumer durables. C) nominal interest payments which households receive from corporations. D) all of the above.
The principal-agent problem occurs:
A. when the principal has less information than the agent. B. when the principal has more information than the agent. C. when the agent has less information than the principal. D. not observed in reality.
The specific goals of central banks include each of the following, except:
A. low and stable inflation. B. low and stable unemployment. C. high and stable real growth. D. high levels of exports.