For a firm to maximize profits, the marginal product of the last dollar spent on each resource must be equal.
Answer the following statement true (T) or false (F)
True
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Which of the following statements would Milton Friedman disagree with?
A) Monetary policy has few short-run effects on the real economy. B) In the long run, changes in the money supply primarily affect the price level. C) In practice, there is little scope for using monetary policy actively to smooth out business cycles. D) The Federal Reserve cannot be relied on to effectively smooth out business cycles.
Which of the following is an accurate statement about economics?
a. It helps us understand the consequences of our choices. b. It tells us when to choose. c. It tells us how to choose. d. It is an objective guide of what to choose.
Monopolists are price ______.
a. makers b. takers c. followers d. ignorers