A Common Assumption Among Macroeconomists Is That When Real GDP

question 39

Multiple Choice

A common assumption among macroeconomists is that when real GDP is less than potential output,factor prices adjust and the

• A)AS curve shifts to the left fairly rapidly.
• B)AS curve shifts to the right only very slowly.
• C)AS curve shifts to the right very rapidly.
• D)AD curve shifts to the left rapidly.
• E)None of the above - the AS curve remains unchanged.

Interpret diagrams related to economies and diseconomies of scale, minimum efficient scale, and constant returns to scale.

Distinguish between the phases of economies of scale, constant returns to scale, and diseconomies of scale in the long-run.

Estimate the impact of input adjustment on long-run average total cost within different scales of production.

Assess real-world business decisions related to plant size, scale of operations, and their cost implications.

---

Definitions:

Success Indicator

A measurable value or metric that demonstrates the effectiveness, achievement, or progress toward a specific goal or objective.

Quantity Of Production

Refers to the total amount of goods or services produced by a company or industry within a specific period.

Soviet Union

A former federal socialist state in Eurasia that existed from 1922 to 1991, composed of multiple Soviet republics, and known for its role in global politics, particularly during the Cold War.

Creative Destruction

is an economic concept that describes the process by which newer innovations replace outdated industries or products, driving economic growth.