Answer the following statement(s) true (T) or false (F)
1. If a government collects more taxes than it spends, there is a budget deficit.
2. Firms and households create the demand for loanable funds.
3. Both the supply and the demand curves of loanable funds are negatively sloped.
4. A low saving rate makes more money available for investment.
5. Early in the twenty-first century, it was common for people to get mortgages with no down payment and minimal documentation.
1. False
2. True
3. False
4. False
5. True
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Increasing marginal returns always occurs when the
A) marginal product of an additional worker exceeds the marginal product of the previous worker. B) average product of an additional worker exceeds the average product of the previous worker. C) marginal product of an additional worker is less than the marginal product of the previous worker. D) average product of an additional worker is less than the average product of the previous worker. E) marginal product of an additional worker exceeds the average product of the previous worker.
The notion that when the price of an input falls, a firm's marginal cost curve shifts down and overall production increases so that more of every input is employed is known as
a. the output effect. b. the substitution effect. c. the input effect. d. the cost effect.