A profit-maximizing firm always
a. sells its output at P = MR.
b. produces at the output at which MR = 0.
c. hires labor until the MRP of labor = 0.
d. produces every unit of output for which MR > MC.
d
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In the first quarter of 2009, the United States trade deficit fell to its lowest level in a decade. This means that
A) the United States imported more from the rest of the world than it exported to the rest of the world. B) foreign countries exported more to the United States than they imported from the rest of the world. C) foreign countries imported more from the United States than they exported to the United States. D) the United States exported more to foreign countries than it imported from the rest of the world.
How would a negative real shock be represented in the AS/AD model?
A. As a leftward shift of the long-run aggregate supply curve that reduces growth and increases inflation. B. As a rightward shift of the long-run aggregate supply curve that reduces growth and increases inflation. C. As a leftward shift of the long-run aggregate supply curve that increases growth and reduces inflation. D. As a rightward shift of the long-run aggregate supply curve that increases growth and reduces inflation.