In the short run and in the long run, there is a tradeoff between inflation and unemployment.
a. true
b. false
Ans: b. false
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A perfectly competitive firm is producing at the quantity where marginal cost is $6 and average total cost is $4. The price of the good is $5. To maximize its profit, this firm should
A) raise its price. B) lower its price. C) increase its output. D) decrease its output. E) increase the price it charges for its product.
Banks would be expected to minimize holding excess reserves because this practice is:
a. illegal. b. not profitable. c. technically difficult. d. subject to a stiff excess reserves tax.
Final goods and services refer to:
a) goods and services that are unsold and therefore added to inventories. b) goods and services whose value has been adjusted for changes in the price level. c) goods and services purchased by ultimate users, rather than for resale or further processing. d) the excess of U.S. exports over U.S. imports.
Refer to the below graph. If the price is P3, then the total revenue is represented by area:
A. B + C + D
B. E + F + G
C. B + C + D + E + F + G
D. A + B + C + D + E + F + G