Studies show that the supply curve for bananas has shifted. All of the following could be possible explanations for the shift, except one. Which is the exception?
a. The price of land for growing bananas has risen.
b. Weather conditions in banana-growing countries have worsened.
c. The price of apples has fallen.
d. The price of bananas has risen.
e. The salaries paid to banana growers has risen.
D
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When developing classical models, there is an assumption that wages and prices will remain fixed relative to changes in supply and demand
Indicate whether the statement is true or false
Complete crowding out occurs when
A) monetary policy has no effect on income. B) fiscal policy has no effect on income. C) monetary policy has no effect on interest rates. D) fiscal policy has no effect on interest rates.
Which of the followings does NOT describe the money market in the ISLM model?
A) money demand function B) investment function C) money market equilibrium condition D) money supply
A firm is using 50 units of labor and 100 units of capital to produce 2,000 units of output. The price of labor is $200 per unit and the price of capital is $100 per unit. At these input levels, another unit of labor adds 400 units to output and another unit of capital adds 600 units to output. The firm
A. is minimizing the cost of producing 2,000 units of output. B. could produce 6 more units of output at the same cost by switching $1 from labor to capital. C. could produce 4 more units of output at the same cost by switching $1 from labor to capital. D. could keep output constant and reduce cost by using more capital and less labor. E. both c and d