Which of the following is an implication of the law of diminishing returns?
a. Total output will decline as more workers are hired.
b. In the long run, average total cost will eventually decline as output is expanded.
c. In the short run, expansion of output will eventually lead to increases in marginal cost and average total cost.
d. A doubling of all inputs will lead to more than a doubling of output.
C
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Monetarism is a school of thought put forth by ________, who argued that the economy would most likely be at potential GDP
A) Finn Kydland and Edward Prescott B) Milton Friedman C) Robert Lucas and Thomas Sargent D) Karl Marx
Which of the following is true regarding economic fluctuations in the United States?
a. Prior to World War II, economic ups and downs were more moderate than after the war. b. Prior to World War II, annual increases in real GDP of more than 5 percent were unheard of. c. Real GDP grew rapidly during the 1930s. d. The 1930s was a period of prolonged economic stagnation and high unemployment.