In the short run, with predetermined prices, when output is greater than aggregate expenditure, firms will:
A. increase aggregate expenditure.
B. increase production.
C. reduce production.
D. decrease aggregate expenditure.
Answer: C
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Like the monetarists, new classical economists favor
a. money growth aimed at achieving a nominal GDP target. b. discretionary policy action. c. a money growth rate that stabilizes output. d. a money growth rule that guides monetary policy.
One of the characteristics of the cap-and-trade system is that
A. there is no way to ensure that pollution is reduced below some allowable total amount. B. it is more expensive than a command-and-control system. C. it is inflexible, and does not respond well to differences in the marginal cost of pollution reduction. D. it reduces the economic damage that would have been done by a command-and-control system.
Exhibit 11-10 Labor and wage rate data Labor Wage 6 $12 7 13 8 14 9 15 10 16 In Exhibit 11-10, the marginal factor cost of the 8th employee is:
A. $14. B. $13. C. $21. D. $112.
Attaining "allocative efficiency" means that:
A. The law of increasing opportunity costs has reached a maximum B. The least costly methods are being used to produce a product C. Resources are being devoted to the production of products most desired by society D. The gap between marginal benefits and marginal costs of the product is biggest