The use of a central planning board or commission to answer the fundamental economic questions is typical of what kind of economy?
a. traditional
b. supply
c. command
d. market
c. command
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Mars Inc produces 100,000 boxes of Snickers bars which sell for $4 a box. If variable costs are $3 per box, and it has $150,000 fixed operating costs, in the short run, it should
A) shut down as fixed costs are not being covered. B) keep producing as profits are $50,000. C) keep producing as variable costs are being met. D) keep producing as total costs are being recovered.
An inflationary gap is the amount by which
A) total planned production exceeds total planned real expenditures in the long run. B) the short-run equilibrium level of nominal GDP is above the short-run level of real GDP. C) the short-run equilibrium level of nominal GDP is below the short-run level of real GDP. D) the short-run equilibrium level of real GDP is above the full-employment level of real GDP.
Refer to the following graph. An increase in aggregate demand when the economy is already at full employment is reflected as a rightward shift of the aggregate demand curve from
a. aggregate demand would have to increase.
b. aggregate demand would have to decrease.
c. aggregate supply would have to increase.
d. aggregate supply would have to decrease.
What are the two approaches followed by the U.S. government to ease the burden on the victims of free trade?
What will be an ideal response?