Which of the following paired concepts are equivalent to each other?
a) increasing returns; diseconomies of scale
b) increasing returns; increasing costs
c) increasing returns; decreasing costs
d) increasing costs; economies of scale
e) constant costs; economies of scale
Ans: c) increasing returns; decreasing costs
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Answer the following statements true (T) or false (F)
1. The CPI measures price changes for only about two-thirds of all spending. 2. The GDP Implicit Price Defoliator is the broadest index of price changes. 3. The PPI is an index of the price level of aggregate output. 4. Check able deposits are counted as part of the U.S. money supply. 5. Savings deposits are not counted as part of the M1 measure of the U.S. money supply.
Look at your dollar bill. Is it crisp and unmarred or old, wrinkled, and bent? The difference has much to do with the number of times that poor dollar has had to work during the year. Economists refer to that number as the
a. quantity theory of money b. velocity of money c. equation of exchange d. reproduction rate of money e. expenditure rate of money
Suppose there is a decrease in aggregate demand. If the Fed wants to stabilize output it could
a. buy bonds. These purchases also move the price level closer to its original level. b. buy bonds. However these purchases move the price level farther from its original level. c. sell bonds. These sales also move the price level closer to its original level. d. sell bonds. However these sales move the price level farther from its original level.
A major problem with commodity money is that, to be useful, money must be
A. divisible. B. storable. C. portable. D. All of these responses are correct.