Economies of scale suggests that as the level of production:
a. decreases, the average cost of producing each individual unit increases.
b. increases, the average cost of producing each individual unit increases.
c. decreases, the average cost of producing each individual unit declines.
d. increases, the average cost of producing each individual unit declines.
d. increases, the average cost of producing each individual unit declines.
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By reducing transactions and information costs, financial intermediaries can
A) offer savers higher interest rates. B) offer borrowers lower interest rates. C) earn a profit. D) all of the above.
In an economy in which real output grows at an average rate of 3 percent per year, a 7 percent average rate of growth in the money supply would result in
a. an inflation rate of 4 percent, if velocity were constant. b. an inflation rate of -4 percent, if velocity were constant. c. a $4 increase in the price level per year. d. a $4 decrease in the price level per year.