A situation in which spending exceeds income is
A) average propensity to save. B) dissaving.
C) the saving function. D) the consumption function.
B
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A decrease in the reserve requirement ________ bank reserves and ________ the money supply
A) increases; increases B) decreases; decreases C) increases; decreases D) decreases; increases
Because there are many sellers in a competitive market, individual firms are unable to maximize profits
a. True b. False Indicate whether the statement is true or false
Since externalities tend to keep markets from reaching a socially optimal equilibrium, government action
a. is always needed because private solutions can never be attained. b. is needed when private solutions fail to arise. c. will be needed only to correct for positive externalities. d. will be needed only to correct for negative externalities.
The most likely explanation for economies of scale is
a. coordination problems. b. specialization of labor. c. increasing marginal cost. d. decreasing marginal cost.