If a Firm Can Double Inputs And, Thereby, More Than

question 134

Multiple Choice

If a firm can double inputs and, thereby, more than double output over the range of output the market demands, it is said to be experiencing

• A)decreasing minimum efficient scale
• B)increasing returns to scale
• C)constant returns to scale
• D)decreasing returns to scale
• E)increasing long run average cost

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Definitions:

Demand for Money

The desire to hold cash or easily liquidable assets, influenced by interest rates, income levels, and economic activity.

Contractionary Monetary Policy

A form of monetary policy that aims to reduce the rate of monetary expansion to tackle inflation, often by increasing interest rates.

Aggregate Demand

All-encompassing demand for goods and services within an economic framework, fixed at a particular price point and time frame.

Interest Rates

represent the cost of borrowing money or the return on savings, playing a crucial role in influencing economic activity and financial decisions.