Constant returns to scale (CRS) implies that when the firm ________
A) doubles all inputs, output more than doubles
B) doubles all inputs, output doubles
C) doubles all inputs, output increases by less than 100 percent
D) doubles all inputs, output remains constant
E) none of the above
B
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The third round of quantitative easing, announced in September 2012, was focused on purchases of:
A) short-term Treasury bills B) long-term Treasury notes C) long-term Treasury notes and sales of short-term Treasury bills D) mortgage-backed securities
During recessions, the value of collateral decreases and corporate profits decrease, so firms do not have cash to finance new investment projects. Therefore, credit rationing depends on the state of the economy. This situation is known as the
A) risk acceptance cost. B) lender's dilemma. C) default premium. D) financial accelerator.