The long-run average cost curve connects the lower part of the short-run cost curves because:
A) prices of inputs are less when acquired for a longer time period.
B) in the long run, firms have more flexibility to change input combinations.
C) specialization of inputs increases productivity only in the long run.
D) the firms earn positive profits in the long run.
B
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Compared with France, who stayed in the ERM, what was the result of Britain's exit?
A) France's economy performed a bit better. B) Britain had an economic recession while France enjoyed an expansion. C) There was no significant difference. D) France had an economic recession while Britain enjoyed an expansion.
If a small open economy reduces its budget deficit, the result will be:
A) a lower world real interest rate, but no change in the domestic real interest rate B) a lower domestic real interest rate, but no change in the world real interest rate C) lower domestic and world real interest rates D) no change in either the domestic or world real interest rate