In Answering the Question, Assume a Graph in Which Dollars

question 41

Multiple Choice

In answering the question, assume a graph in which dollars are measured on the vertical axis and output on the horizontal axis. For a purely competitive firm, total revenue graphs as a

• A) straight, upsloping line.
• B) straight line, parallel to the vertical axis.
• C) straight line, parallel to the horizontal axis.
• D) straight, downsloping line.

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Definitions:

Monetarists

Economists who believe that variations in the money supply are the main source of economic fluctuations.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Monetarists

Economists who posit that variability in the money supply critically impacts the short-term national economic output and the price level over longer spans.

Money Supply

This refers to the total amount of money (including cash, coins, and balances in bank accounts) in circulation within an economy at a given time.