Which of the following is a difference between an active approach to close a recessionary gap and a passive approach to close a recessionary gap?
a. The level of real GDP would be higher in the long run with the active approach, while it will be lower with the passive approach.
b. The level of real GDP would be lower in the long run with the active approach, while it will be higher with the passive approach.
c. The price level would be higher and the level of real GDP would be lower in the long run with the active approach, whereas the price level would be lower and real GDP level would be higher with the passive approach.
d. Only the price level would be lower in the long run with the active approach, whereas it would be higher with the passive approach.
e. Only the price level would be higher in the long run with the active approach, whereas it would be lower with the passive approach.
e
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From Example 7.2, most pizza restaurants have large fixed costs and relatively low variable costs. What does this tell us about the average variable cost (AVC) of producing pizza?
A) AVC is relatively low B) AVC is relatively high C) AVC is high for low quantities but declines quickly D) AVC is increasing for all quantity levels
Refer to the figure. An increase in the number of highly motivated and skilled potential immigrants will:
A. reduce MB and increase MC, lowering the optimal quantity of immigrants.
B. increase MB and reduce MC, raising the optimal quantity of immigrants.
C. increase both MB and MC, and the effect on the optimal quantity is uncertain.
D. reduce both MB and MC, and the effect on the optimal quantity is uncertain.