In contrast to a perfectly competitive firm, a monopolist operates in the long run
A. at a price higher than marginal cost.
B. with a profit equal to zero.
C. at an efficient level of output.
D. at the minimum point on its average total cost curve.
Answer: A
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Which are contractionary fiscal policies?
a. Increased taxation and decreased government spending b. Increased taxation and increased government spending c. No change in taxation and increased government spending d. Decreased taxation and no change in government spending
A home buyer is presented with two options for financing the purchase of a home: a 20 year fixed rate mortgage or a 20 year adjustable-rate mortgage, where the rate adjusts once a year. Which mortgage would you expect to start at the lowest interest rate and why?
What will be an ideal response?
Some good did come from the internet bubble of the late 1990s. One good thing was that:
A. people learned they should not invest in dotcom companies. B. the theory of efficient markets doesn't always hold and consistently better-than-market returns are achievable. C. start-up companies found they could bypass venture capitalists and raise funds directly from the capital markets. D. stock market bubbles do not have to result in an inefficient allocation of resources.
According to the Classical advocates of sound finance, if an economy is in a recession, the government should run:
A. a budget surplus and decrease spending, which will increase output. B. a budget deficit and increase spending, which will increase output. C. neither a surplus nor a deficit since changes in deficit spending do not affect output. D. neither a surplus nor a deficit since changes in spending affect output.