If a large open economy, like the United States, reduces its budget deficit, what impact would this have on a small open economy?

The Fed purchases of long-term assets to stabilize financial markets, reduce long-term interest rates, and improve the investment environment are called: a. structural adjustments. b. financial strengthening. c. quantitative easing

d. inflation targeting. e. stress testing.

Figure 7-11

Figure 7-11 shows an average cost curve with points on it that correspond to three quantity levels. Which of the following statements must be wrong?

a.
The firm's technology may show increasing marginal returns as production increases from A to B.

b.
The firm may have positive fixed costs.

c.
As production expands from A to B to C, the firm may become increasingly difficult to manage efficiently.

d.
The firm's average fixed cost may rise as production increases from B to C.