A basic tenet of the theory of the firm is that the firm's primary objective is to
A. produce a given level of output at a specified cost.
B. operate for the benefit of society.
C. stay out of debt.
D. maximize economic profits.
Answer: D
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Recessions are typically
A) unintended and disruptive. B) easy to predict in advance. C) the result of non-monetary disturbances. D) events economists have a hard time explaining.
Generally, microeconomics
A) has little to say about the entrepreneur B) says a good bit about the entrepreneur. C) equates the entrepreneur and the manager. D) equates management and shareholders.
What is the source of the supply of loanable funds?