X-inefficiency implies:
a. the practice of using less than the optimal amount of inputs for production.
b. the practice of using the lowest quantity of input to produce maximum output.
c. always producing less than the optimal amount of output.
d. excessive use of inputs relative to best-practice methods.
D
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Which of the following occurs if the expected profit increases?
A) Investment demand increases and the demand for loanable funds curve shifts rightward. B) The quantity of investment demanded decreases and there is a movement up along the demand for loanable funds curve. C) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve. D) The savings increases and the supply of loanable funds curve shifts rightward. E) Investment demand decreases and the demand for loanable funds curve shifts leftward.
The primary argument against active monetary and fiscal policy is that
a. attempts to stabilize the economy do not constitute a proper role for government in a democratic society. b. these policies affect the economy with a long lag. c. these policies affect the economy too quickly and with too much impact. d. history demonstrates that interest rates respond unpredictably to active policies, leading to unpredictable effects on income.