Economic theory has traditionally focused on optimality in decision making.
Answer the following statement true (T) or false (F)
True
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Which of the following represents one or more of the key goals and objectives of the Fed?
a. Promotion of low-priced foreign imports b. Restoration of scarce and depletable natural resource stocks c. Promotion of U.S. corporate interests overseas d. High levels of employment, economic growth, and stability in prices
Refer to the data provided in Table 9.4 below to answer the question(s) that follow. Table 9.4qTFCTVCTCMCAVCATC0$100 $0$100 ---- -- 11004014040 40 140 21006016020 30 80 31009019030 30 63.334100124 224 343156 5100180 280 56 36 56 6100 264 364 84 44 60.677100 372 472 108 53.14 67.42Refer to Table 9.4. The market price is $84 and this firm is producing four units of output. Which of the following would you recommend to this firm?
A. Reduce price to $34, so that marginal cost will equal marginal revenue at 4 units of output. B. Increase output to seven units so that price is less than marginal cost. C. Increase output to six units, so that marginal cost equals marginal revenue. D. Continue producing four units of output, because the firm is able to make an economic profit.
Which of the following explains the vicious circle of poverty? a. By investing in education and infrastructure at the same time, the country can overcome the problems of poverty
b. Poverty arises out of the lack of investment, but they cannot invest because they are poor. c. A nation can shift its production possibility curve inward by shifting more resources into the production of capital goods. d. A nation can shift its production possibility curve outward by shifting more resources into the production of consumer goods. e. There are dual economies in the world: Some are rich and others are poor.
Which of the following correctly describes crowding out?
a. The displacement of interest-sensitive private investment that occurs when increased government deficit spending drives up interest rates. b. The potential for government spending to stimulate private investment in an otherwise sluggish economy. c. The displacement of poverty-stricken people from low-income assistance programs when outlays are reduced to balance the federal budget. d. The decline in market interest rates on account of increased fiscal spending on welfare programs.