The income-expenditure model of real GDP determination is due to the work of
A) Adam Smith.
B) J. B. Say.
C) John Maynard Keynes.
D) Roger Miller.
C
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A single-price monopolist will find when it produces its profit-maximizing amount of output that
A) price exceeds marginal revenue. B) price exceeds marginal cost. C) marginal revenue equals marginal cost. D) All of the above occur at the profit-maximizing output level.
If the purchasing power of the dollar is greater than the purchasing power of the euro, purchasing power parity predicts that the exchange rate will
A) not fluctuate and stay constant in the long run. B) increase if the exchange rate is greater than 1 euro per dollar. C) decrease if the exchange rate is less than 1 euro per dollar. D) be equal to the relative purchasing power across the currencies in the long run.
One difference between moral hazard and adverse selection is
a. Moral hazard has to do with unobservable characteristics of individuals b. Adverse selection has to do with unobservable actions of individuals c. Adverse selection is when individuals change their behaviors because of a contract d. Adverse selection is when you choose the wrong answer on a test
If average costs of production decline with increases in output for a particular large firm in an industry:
a. many small firms will be more efficient than the single large firm in the industry. b. the single large firm will be more efficient than many small firms in the industry. c. product diversification will be necessary for the firm to spread its overhead. d. diseconomies of scale become significant as its output increases. e. its variable cost of production will exceed its fixed costs.