In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that
A) existing capital equipment can be used more intensively.
B) the unemployment rate usually rises dramatically along with the price level.
C) workers can be switched from counted to uncounted production.
D) wage rates rise almost simultaneously with the price level.
A
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According to Keynesian theory, the most important determinant of saving and consumption is
A) the stock of durable goods in the consumer's possession. B) the stock of liquid assets. C) the level of real disposable income. D) the level of consumer indebtedness.
A sole proprietorship is typically a relatively small business because
a. its operations must stay within state borders b. it is operated out of the proprietor's home c. there are no employees, only working family members d. there are no bank loans available for expansion e. expansion often requires a partner or conversion to another form of business organization