If technological innovation occurs when a firm is experiencing diseconomies of scale:
A. short-run average total costs will fall as output expands.
B. the long-run average total cost curve will shift down but will still rise as output expands.
C. long-run average total costs will remain the same as output expands.
D. product prices will rise, leading to inflation.
Answer: B
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Which of the following holds true in a circular flow diagram?
A) Income flow are represented by drawing an arrow from the household sector to firms. B) Factor flows are represented by drawing an arrow from the firm sector to the household sector. C) Production flows are represented by drawing an arrow from the firm sector to the household sector. D) Expenditure flows are represented by drawing an arrow from the firm sector to the household sector.
When aggregate demand exceeds current production
A. both output and the price level are in equilibrium. B. output is not in equilibrium, but the price level is. C. prices are not in equilibrium, but output is. D. neither output nor the price level is in equilibrium.
You are given the following information on the banking system
Reserve requirement rr = 0.08 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.05 Compute the simple deposit and money multipliers.
Unemployment can be caused by downswings in the business cycle, people changing jobs, different skills needed by employers, or seasonal fluctuations in demand
a. True b. False Indicate whether the statement is true or false