Sovereign default refers to
A) default due to excessive money supply growth.
B) default on private debt instruments.
C) default on government debt instruments.
D) bankruptcy of firms, resulting in equity losses.
C
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Classical economists think that the government ________ use fiscal policy to dampen the business cycle because prices and wages adjust ________
A) should not; rapidly B) should not; slowly C) should; slowly D) should; rapidly
Refer to the graph shown. If hamburgers are produced by a pure monopoly firm that maximizes profit, the social cost of monopoly will be represented by the area:
A. GFHJ. B. ABCG. C. BFC. D. ABFG.
Exit from a competitive industry will occur until economic
A. losses are driven to zero. B. profits just offset all accounting losses. C. costs are sufficiently below accounting losses so that profits are realized. D. profits are driven to zero.
Refer to the table below, and suppose that the firm uses production technique D. If each of the 70 units of Zenia that are produced sells for $1 apiece, then how much will be the profits of the firm from 70 units?
Suppose a firm can produce 70 units of a product, Zenia, by combining labor, land, capital, and entrepreneurial ability, as in the four alternative techniques shown in the table below. Assume further that the firm can hire labor at $3 per unit, land at $3 per unit, capital at $6 per unit, and entrepreneurship at $9 per unit.
A. $70
B. $57
C. $13
D. $83