The principle that a firm should produce up to the point where the marginal revenue from the sale of an extra unit of output is equal to the marginal cost of producing it is known as the:
A. output-maximizing rule.
B. profit-maximizing rule.
C. shut-down rule.
D. break-even rule.
Answer: B
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The government passed the Economic Recovery Act in October 2008 to prevent the financial crisis from continuing to worsen. A controversial component of this act was the
A) temporary decrease in the federal deposit insurance limit. B) sale of new subprime mortgage assets. C) borrowing of $150 million from AIG. D) Troubled Asset Relief Program (TARP).
In the mid-1830s, the U.S. entered an inflationary period that culminated in the depression of 1839-1843 . Contemporary economic historians attribute this economic downturn to
a. the demise of the Second Bank of the U.S. in 1832. b. over-issue of gold coins by the U.S. Mint. c. over-expansion by the manufacturing sector. d. external forces, including large inflows of specie from Mexico and Europe.
When examining the costs of regulation to the U.S. economy, economists can safely ignore the opportunity costs of regulation because they are relatively insignificant compared with the direct costs of regulation
a. True b. False Indicate whether the statement is true or false
Expansionary fiscal policy during a recession is most effective when it
a. creates jobs, even if they are on unproductive projects. b. directs the economy to full employment and resources into productive projects. c. substantially changes the composition of aggregate demand. d. provides members of Congress with large political contributions.