If a firm shuts down it
A) will produce nothing but must pay its fixed and variable costs.
B) will suffer a loss equal to its fixed costs.
C) will earn enough revenue to cover its variable costs but not all of its fixed costs.
D) will produce nothing but must pay its variable costs.
B
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Monetarists believe:
A. the cause-and-effect relationship hypothesized by the Keynesians understates the impact of stimulative monetary policy. B. the cause-and-effect relationship hypothesized by the Keynesians is an accurate description of how monetary policy works. C. since the economy is operating at full employment, any stimulative monetary policy will cause the inflation rate to rise. D. the cause-and-effect relationship hypothesized by the Keynesians is backwards, and decreases in the money supply actually stimulate economic activity.
If the wage rate were $250, how many workers would be hired?
