As the quantity of labor increases, the marginal product of capital A) is constant. B) increases. C) decreases. D) may either increase or decrease. ANSWER B
Date: September 10th, 2020
Business fixed investment a. includes the building of single- and multi-family housing units. b. is the change in business inventories. c. is the smallest subcomponent of investment. d. consists of purchases of a newly produced plant and equipment. ANSWER D
Date: September 10th, 2020
In 2012, direct government purchases equaled ________ percent of expenditures of all levels of government. A) 71 B) 42 C) 26 D) 55 ANSWER B
Date: September 10th, 2020
If the Fed were to announce that fighting inflation is not a high priority for the immediate future ________. A) households might expect higher inflation B) the short run aggregate supply would shift upwards C) firms might begin raising their prices to keep up with expected inflation D) all of the above E) none of […]
Date: September 10th, 2020
In the Keynesian model, everything else equal, a higher level of income a. increases money demand and reduces the interest rate. b. increases money demand and increases the interest rate. c. increases savings and decreases the interest rate. d. increases investment and has no effect on the interest rate. e. both b and c. […]
Date: September 10th, 2020
In the classical model, a decrease in immigration would a. decrease labor supply, increase the real wage, and decrease output. b. increase labor supply and the real wage, and decrease output. c. increase labor demand and the real wage, and increase output. d. reduce real wages and reduce output. ANSWER A
Date: September 10th, 2020
When drawn against the real interest rate, the optimal investment schedule shifts to the right if A) current total factor productivity z increases. B) current total factor productivity z decreases. C) future total factor productivity z’ increases. D) future total factor productivity z’ decreases. ANSWER C
Date: September 10th, 2020
Panel (a) in Figure 6.1 depicts a. low interest elasticity of money demand. b. high interest elasticity of money demand. c. no interest elasticity of money demand, which is the same as Panel (b). d. None of the above ANSWER A
Date: September 10th, 2020
In the simple Keynesian model, if the equilibrium level of income is $300 billion, the MPC is 0.75, and government expenditures increase by 20 billion. What is the new equilibrium level of income? a. $320 billion b. $380 billion c. $220 billion d. $520 billion ANSWER B
Date: September 10th, 2020
The marginal cost of investment for the firm is equal to A) 1. B) -1. C) MP’K. D) -MP’K. ANSWER A
Date: September 10th, 2020
