After some point successive equal increases in a variable factor of production, when added to a fixed amount of inputs, will result in smaller increases in output. This is known as
A) the long run.
B) the law of diminishing marginal product.
C) marginal physical product.
D) short run average cost.
Answer: B
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Expansionary fiscal policy leads to an increase in net exports, all other things unchanged.
a. true b. false
Answer the following statements true (T) or false (F)
1. The average expected rate of return on an asset can be fully understood as the rate that compensates for risk. 2. The Security Market Line is a straight line that plots how the average expected rates of return on assets and portfolios in an economy vary with their respective levels of nondiversifiable risk as measured by beta. 3. When the Securities Market Line shifts up, the average expected rate of return on investment assets with given risk levels is increasing. 4. The decision of the Federal Reserve to reduce the short-term interest rate will shift the Security Market Line upward.