The shape of a short-run aggregate supply curve basically depends on what happens to production costs and, therefore, to the prices that businesses must receive to cover costs and make a profit as real domestic output expands.
Answer the following statement true (T) or false (F)
True
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According to the Taylor rule, the Federal Reserve lowers the real interest rate as the output gap ________ or the inflation rate ________.
A. decreases; increases B. increases; increases C. increases; decreases D. decreases; decreases
If a firm’s average cost is currently $100, and the marginal cost is $95, then the average cost is currently falling.
Answer the following statement true (T) or false (F)
When total utility is falling
A. marginal utility is at a maximum. B. marginal utility is at zero. C. marginal utility has decreased, but is now increasing. D. marginal utility is negative.
The two fundamental sections of the Balance of Payments accounting system are
A. aggregate consumption and government spending. B. physical investment and ephemeral investment. C. the current account and the capital account. D. the physical and monetary direct transfers among individuals.