A purely competitive seller should produce (rather than shut down) in the short run:
A. only if total revenue exceeds total cost.
B. only if total cost exceeds total revenue.
C. if total revenue exceeds total cost or if total cost exceeds total revenue by some amount
less than total fixed cost.
D. if total cost exceeds total revenue by some amount greater than total fixed cost.
Answer: C
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Suppose government purchases increase by $100 million in an economy, which leads to total output increasing by $500 million. The size of the multiplier is _____
a. $400 b. 5 c. $500 d. 0.5 e. 50
Assume that the yen price of one U.S. dollar rises to 80 yen and that the Bank of Japan has a target exchange rate of 75 yen per dollar. As a result, the Bank of Japan will intervene in the foreign exchange market by:
a. selling U.S. dollars and buying yen. b. selling both U.S. dollars and yen. c. buying U.S. dollars and selling yen. d. buying both U.S. dollars and yen. e. buying U.S. Treasury securities.