The use of _______________ policy should be countercyclical to counterbalance the business cycles of economic downturns and upswings.
a. monetary
b. tax
c. trade
d. savings
a. monetary
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If a firm shuts down in the short run it will
A) break even. B) suffer a loss equal to its fixed costs. C) declare bankruptcy. D) suffer a loss equal to its variable costs.
For the infant-industry argument for tariffs to be appropriate, it is necessary that
A) the industry be deemed essential by the government. B) the government can identify which industries will eventually be able to compete with more established foreign producers. C) only industries that currently are operating efficiently will be protected. D) the country has access to the most modern production techniques.
During Prohibition crime ____ and the amount spent on law enforcement ____
a. stayed roughly the same; remained level b. increased dramatically; more than doubled c. remained level; more than doubled d. decreased slightly; more than doubled
To determine whether or not a pair of goods are complements, economists are interested in the cross price elasticity of demand between the two goods
a. True b. False Indicate whether the statement is true or false