Which of these economic changes was observed during the Great Depression?
a. A fall in the domestic price level leading to an increase in import demand
b. A fall in resource prices leading to an increase in aggregate supply
c. An increase in unemployment leading to a decrease in the aggregate demand
d. An increase in the domestic price level leading to an increase in export demand
e. An increase in real GDP leading to an increase in the real interest rate
QUESTION 2In the long run, a monopolistically competitive firm will set price:
a. at the intersection of the marginal cost and demand curves.
b. at the intersection of the average total cost and demand curves.
c. higher than the competitive level, but lower than the monopoly price.
d. higher than the marginal cost, but lower than average total cost.
QUESTION 3Suppose a firm has an output of 10,000 cans and a total fixed cost of 2,000 . At an output of 5,000 the difference between the total cost and the total variable cost is:
a. b and c.
b. 0.40.
c. the average fixed cost.
d. 2,000.
e. 0.20.
QUESTION 4According to John Maynard Keynes' General Theory of Employment, Interest and Money, the government should _____ in order to get an economy out of a depression.
a. increase spending
b. decrease spending
c. reduce subsidies
d. increase taxes
e. allow the economy to correct itself
QUESTION 5In long-run equilibrium, output is expanded to the minimum long-run average total cost by:
a. perfectly competitive firms but not by monopolistically competitive firms.
b. monopolistically competitive firms but not by perfectly competitive firms.
c. both monopolistically competitive firms and perfectly competitive firms.
d. neither perfectly competitive firms nor monopolistically competitive firms.
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