A "Small" Economy Is One in Which The

question 129

Multiple Choice

A "small" economy is one in which the:

• A) level of output is fixed.
• B) price level is fixed.
• C) domestic interest rate equals the world interest rate.
• D) domestic saving is less than domestic investment.

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Definitions:

Long-Run

A period of time in which all factors of production and costs are variable, allowing for full adjustment to changes.

Marginal Revenue

The increase in revenue from the sale of one more unit of a product or service.

Natural Monopoly

A market situation where a single supplier can provide a good or service more efficiently than any potential competitor, often due to high initial setup costs.

Local Phone Company

A telecommunications company that provides phone services primarily within a local or regional area.