If firms' unplanned inventories are increasing, then in a closed, private economy
A. the level of real national income will rise.
B. actual consumption is greater than planned consumption.
C. the level of real national income will not change in the foreseeable future.
D. consumers are saving more than businesses anticipated.
Answer: D
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A farmer lives on a flat plain next to a river. In addition to the farm, which is worth $F, the farmer owns financial assets worth $A. The river bursts its banks and floods the plain with probability P, destroying the farm
If the farmer is risk averse, then the willingness to pay for flood insurance unambiguously falls when A) F is higher, and A is lower. B) P is lower, and F is higher. C) F & A are higher. D) P is lower, and A is lower. E) A is higher, and F is lower.
In the short run, if a firm's total variable cost curve lies above its total revenue curve at all possible output levels, the firm's minimum short-run loss
a. equals its total fixed cost b. equals zero c. occurs at the maximum point of the total revenue curve d. occurs at the maximum point of its marginal revenue curve e. occurs at the minimum point of its marginal cost curve