According to the aggregate production function, when inputs increase
A. the economy grows.
B. inflation slows.
C. GDP declines.
D. unemployment rises.
Answer: A
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One reason why, in the last four decades, the number of new auto makers in the world has been very small compared to the past is that
A) governments restrict who can produce automobiles. B) new auto makers cannot obtain necessary inputs to produce new cars. C) new producers cannot match the economies of scale of existing auto makers. D) the automobile cannot be improved upon in any way by new producers.
If Canada has a comparative advantage over Denmark in the production of wood, this implies that
a. it requires fewer resources in Canada than in Denmark to produce wood b. the opportunity cost of producing wood in Canada is lower than in Denmark c. Denmark does not benefit by trading with Canada d. Canada should buy wood from Denmark e. Canada does not benefit by trading with Denmark
Which of the following solutions would a Keynesian economist suggest to avoid turning the recession of the late 20s into the depression of the 30s?
A. balance the federal budget B. decrease the available of unemployment compensation C. decrease the interest rate D. decrease government spending
In the graph below, the price of capital is $500 per unit. Given a total cost of $50,000, the maximum amount of output possible is
A. 1,100 units of output. B. 500 units of output. C. 10,000 units of output. D. 50,000 units of output. E. none of the above