In a market economy, the decisions about what to produce and how much of each good or service to produce are made by

The tax multiplier is equal

What will be an ideal response?What will be an ideal response?

Which of the following statements about the short run and long run is true?

A) The number of firms in the industry is fixed in the short run, but in the long run the number can change. B) Free entry and exit of firms is possible in the short run, but entry and exit of firms is restricted in the long run. C) The short-run average cost curves lies below the long-run average cost curves. D) A firm can vary all of its factors of production in both the short run and the long run.