In the long run, firms in many industries often experience a falling average total cost curve as a result of:
a. gains through trade.
b. increasing marginal returns.
c. economies of scale.
d. lower fixed costs.
c
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Which of the following is true of inflation?
a. It is an increase in the general price level of goods and services. b. The purchasing power of money increases as the result of inflation. c. Inflation is similar to interest payments on future money income, such as pensions and receipts from outstanding loans. d. Inflation has no effect on real income.
The balance of trade account reflects only transactions associated with the international trade of goods
a. True b. False Indicate whether the statement is true or false
The two main methods of measuring GDP are
A. the income approach and the expenditure approach. B. the income approach and the receipts approach. C. the saving approach and the investment approach. D. the goods approach and the services approach.
In explaining why the level of investment spending fell to such a low level during the Great Depression, Keynes argued that
A. consumers were not saving enough of their income, so there was little credit available to businesses. B. the interest rate was too high. C. the interest rate was too low. D. businesses held bleak expectations concerning future business activity and were unwilling to borrow even at low interest rates.