In the above figure, if the price is P1, the firm will produce
A) nothing.
B) where MC equals ATC.
C) where MC equals P1.
D) where ATC equals P1.
C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A decrease in supply, holding demand constant, will cause:
A. Higher prices and a larger quantity sold B. Higher prices and a smaller quantity sold C. Lower prices and a smaller quantity sold D. Lower prices and a larger quantity sold
Assume that there are no excess reserves in the banking system when the reserve requirement is 20%. The purchase of $10,000 in U.S. government securities by the Fed from Academy National Bank has the potential to ultimately increase the money supply by: a. $2,000
b. $8,000. c. $10,000. d. $20,000. e. $50,000.
Which of the following statements is true about a competitive market? A competitive market
A) has a handful of sellers but always has many buyers. B) must have a physical location. C) includes markets for goods and services but not for inputs. D) has so many buyers and sellers that no one can influence the price. E) has one seller competing to sell his or her product.