What are constant returns to scale?
a. cost disadvantages in an output range where LRATC rises as output expands
b. per-unit cost reductions in an output range where LRATC falls as output increases
c. returns in an output range where LRATC does not change as output varies
d. cost savings that occur in an output range where LRATC falls due to low output
c. returns in an output range where LRATC does not change as output varies
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Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and GDP Price Index rises. b. The real risk-free interest rate falls and GDP Price Index falls. c. The real risk-free interest rate rises and GDP Price Index falls. d. The real risk-free interest rate and GDP Price Index remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following events occurred during the 2000 to 2003 time-frame and had an important impact on the deficit/surplus projections?
A. The decrease in unemployment rates from 2002 to 2003 B. The increase in inflation rates from 2000 to 2002 C. The recession of 2001 D. The increase in interest rates from 2001 to 2003