In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker
a. decreased between 1998 and 2008, so we would expect the standard of living to have decreased accordingly.
b. increased between 1998 and 2008, so we would expect the standard of living to have increased accordingly.
c. decreased between 1998 and 2008, so we would expect inflation to have decreased accordingly.
d. increased between 1998 and 2008, so we would expect inflation to have increased accordingly.
a
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If the Fed engages in quantitative easing, it has likely
A) started paying interest on required reserves. B) increased the federal funds rate by selling private securities. C) increased the discount rate to prevent inflation. D) decreased the discount rate by selling its own securities. E) decreased the federal funds rate to almost zero by buying large sums of securities.
A student wrote: "When the average product of labor exceeds the marginal product, the marginal product is increasing." If you were the instructor, how would you correct this statement?
What will be an ideal response?
Sources of economic growth include
a. additional amounts of more highly skilled and educated labor. b. additional amounts of capital. c. new technology. d. All of these.
The idea that the interaction of the multiplier and accelerator alone generates business cycles supports the view that the economy is
a. dependent on external shocks, such as housing booms, to stimulate investment which triggers the economy into a cycle b. always moving toward its equilibrium position, albeit not without going through a cyclical path c. always at full employment because the interaction is a chronic stimulant to the economy d. always stable, closely following the trend line of economic growth e. inherently unstable