A Detroit Business Advertises, "The More We Sell, the Lower

question 143

Multiple Choice

A Detroit business advertises, "The more we sell, the lower the price, and the lower the price, the more we sell." This firm is experiencing

• A)decreasing returns to scale.
• B)constant returns to scale.
• C)increasing returns to scale.
• D)abnormal demand patterns.

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Definitions:

Unemployment

The condition of being capable and willing to work, but unable to find employment.

Money Supply

The complete aggregate of monetary assets in an economy at a certain moment.

Natural Rate of Unemployment

The level of unemployment consistent with a stable rate of inflation, determined by the structure and dynamics of the labor market.

Phillips Curve

An economic theory suggesting an inverse relationship between the level of unemployment and the rate of inflation within an economy.