Marginal cost crosses the
a. AVC curve at the highest point of the AVC curve.
b. ATC curve at the lowest point of the ATC curve.
c. AFC curve at the lowest point of the AFC curve.
d. ATC curve at the highest point of the ATC curve.
b. ATC curve at the lowest point of the ATC curve.
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Under the Bretton Woods system, a country could alter its exchange rate
A) by changing its value relative to gold. B) whenever it determined that there was a fundamental disequilibrium. C) only when the IMF permitted due to a fundamental disequilibrium. D) under no circumstances.
Tony's Taco Truck has an average variable cost of $1.50 and a marginal cost of $2 when it produces 50 units of output (tacos). We can conclude that the average variable cost of producing 51 tacos is a. higher than $1.50
b. lower than $1.50. c. equal to $1.50 d. either higher or lower than $1.50 depending on the direction of the marginal cost curve.
Decision makers engage in marginal thinking by
What will be an ideal response?
Suppose the economy is initially in long-run and short-run equilibrium. If the Fed decides to pursue a contractionary monetary policy, we will see
A. bond prices fall, interest rates rise, aggregate demand falls as investment spending decreases and consumption spending remains unchanged, and real GDP and the price level decrease in the short run, but only the price level falls in the short run. B. bond prices fall, interest rates fall, aggregate demand remains unchanged as consumption spending decreases, but investment spending increases. GDP remains constant in both the short run and the long run, but the price level falls in both. C. bond prices fall, interest rates rise, aggregate demand falls as investment and consumption spending decrease, and real GDP and the price level decreasing in the short-run, but only the price level decreasing in the long run. D. interest rates rise but no change in bond prices. Aggregate demand falls as consumption spending and investment spending decrease, and the price level and real GDP fall in both the short run and the long run.