A recessionary output gap is defined to be when:
A. equilibrium aggregate expenditure is below full employment GDP.
B. equilibrium aggregate expenditure is above full employment GDP.
C. government spending is insufficient causing a gap in GDP.
D. equilibrium aggregate expenditure is equal to full employment GDP.
Answer: A
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If the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is $5, what is the rental rate for capital?
A) $0.5 B) $1 C) $2 D) $10
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.
According to the graph shown, the amount bought by domestic consumers when there is open trade for this good is:
A. 1150 B. 250. C. 1500. D. 500.
Holding nominal money balances constant, a decrease in the price level
A. causes the real value of the money balances to increase, in turn increasing total planned real expenditures. B. causes the real value of the money balances to increase, thereby increasing the interest rate. C. generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in total planned real expenditures. D. causes the real value of the money balances to decrease, in turn decreasing total planned real expenditures.
What is the shape of the long-run supply curve in an increasing-cost industry?
A. inverted U-shape B. downward sloping C. upward sloping D. horizontal