If the aggregate supply curve is horizontal,
a. there are unemployed resources in the economy.
b. the economy is inside the production possibilities curve.
c. it is possible to increase output without driving up prices by putting unemployed resources to work.
d. All of these.
d. All of these.
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If the total cost of 20 units of a product is $20, and the total cost of 21 units is $21, then from 20 to 21 units of product the:
A. Marginal cost is decreasing B. Marginal cost equals average total cost C. Marginal cost equals average variable cost D. Average total cost equals average variable cost
According to the quantity theory of money, if the economy were facing inflation, the Federal Reserve Bank could combat it by:
A. increasing the supply of money. B. increasing taxes. C. cutting taxes. D. decreasing the supply of money.