Assume that in the short run a firm is producing 100 units of output, has average total costs of $100, and average variable costs of $50. The firm's total fixed costs are
A) $50.
B) $5,000.
C) $150.
D) $15,000.
Answer: B
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Major macroeconomic questions include all of the following EXCEPT:
A. Why does inflation vary over time and across countries? B. What causes differences in wages between men and women? C. What causes economic growth? D. What are the causes of unemployment?
If the central bank can act as a lender of last resort during a banking panic, banks can
A) call in their loans to their customers and eventually restore the public's faith in the banking system. B) satisfy customer withdrawal needs and eventually restore the public's faith in the banking system. C) borrow more and more money from the central bank, and this will lower its reserves and decrease the public's faith in the banking system. D) encourage the public to borrow directly from the central bank, and this will worsen the banking panic.
Which of the following statements is correct?
a. A decrease of government spending is most effective in the flat part of the SRAS curve. b. An increase in interest rates is most effective in the flat part of the SRAS curve. c. An increase in the money supply is most effective in the steep part of the SRAS curve. d. A tax increase is most effective in the steep part of the SRAS curve.
Unemployment insurance payments act as automatic stabilizers by:
A. allowing for more consumer spending during prosperity. B. making the unemployment rate worse during a recession. C. allowing for more consumer spending during a recession. D. changing the Phillips curve to a Laffer curve.