A firm increases both its plant and its labor force by the same percentage and its average total costs remain unchanged. Is the firm experiencing increasing returns to scale, constant returns to scale, or decreasing returns to scale?

A shortage will exert pressures for the price to decrease

a. true b. false

Starting from long-run equilibrium, the long-run impact of an increase in autonomous investment, compared to the original equilibrium, is:

A. higher inflation and the same output. B. lower inflation and lower output. C. higher inflation and higher output. D. lower inflation and the same output.