If there are external costs in production and firms do not have to account for these costs, then firms will produce
A. an output level that is either above or below the efficient level.
B. at the efficient level.
C. an output level that is above the efficient level.
D. an output level that is below the efficient level.
Answer: C
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The extra benefit resulting from a small increase in an activity is called the
A) opportunity cost. B) marginal benefit. C) diminishing returns of the activity. D) marginal cost.
When the AE line lies above the 45° line,
A) real GDP exceeds aggregate planned expenditure. B) there are unplanned increases in inventories. C) aggregate planned expenditure is less than real GDP. D) the price level is rising. E) there are unplanned decreases in inventories.
An increase in the U.S. demand for imports will ________ the supply of dollars and lead the dollar to ________
A) increase; appreciate B) decrease; appreciate C) increase; depreciate D) decrease; depreciate
Inflation often bestows unearned income on
a. homeowners. b. lenders. c. creditors. d. fixed income receivers.