A situation in which the long-run average total cost of production falls as the quantity of output increases is called increasing returns to scale

If the natural rate of unemployment is 6%, but the Fed thinks it is 5% and attempts to use monetary policy to move unemployment from 6% to 5%, then in the short run which of the following variables will the Fed's policy raise?

a. the price level and real GDP b. the price level but not real GDP c. real GDP but not the price level d. neither real GDP nor the price level

If firms have to account for external costs in production, then they will produce an output level that is ________ the efficient level.

A. below B. at C. above D. either above or below