Keynes believed that economies experiencing high unemployment should adopt policies to
a. reduce the money supply.
b. reduce government expenditures.
c. increase aggregate demand.
d. increase aggregate supply.
c
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A horizontal merger involves
A) the joining of two firms at different stages of the production process. B) the separation of management from ownership. C) the joining of two firms selling similar products. D) the exchange of debt for stock.
Eli Whitney III receives a patent for the rayon gin, a product for which there are no close substitutes. Eli will maximize his profit when
a. MR is maximized b. MR = MC c. MR > MC d. MR < MC e. P = MR > MC
Suppose the United States can produce either 1 ton of potato or 0.5 tons of wheat per worker per year, while Ireland can produce either 3 tons of potatoes or 2 tons of wheat per worker per year. There can be mutual gains from trade if: a. the United States specializes in potatoes because of its comparative advantage in producing potatoes
b. the United States specializes in wheat production because of its absolute advantage in producing wheat. c. the United States specializes in wheat production because of its comparative advantage in producing wheat. d. the United States specializes in potatoes because of its absolute advantage in producing potatoes.
When an industry is a natural monopoly,
a. it is characterized by constant returns to scale. b. it is characterized by diseconomies of scale. c. a larger number of firms may lead to a lower average cost. d. a larger number of firms will lead to a higher average cost.