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Which Two of the Ten Principles of Economics Imply That

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Which two of the Ten Principles of Economics imply that the Fed can profoundly affect the economy?


Definitions:

Average Variable Cost

The total variable cost per unit of output, calculated by dividing total variable costs by the quantity of output produced.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced, expressed on a per unit basis.

Marginal Revenue

The increased income from the sale of one additional unit of a good or service.

Average Fixed Cost

Total fixed cost divided by the number of units produced. It always declines as output increases.

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