If there is an unanticipated increase in aggregate demand, which of the following is most likely to occur?
a. a reduction in the price level
b. an increase in the rate of unemployment
c. an increase in employment
d. an expansion in the federal budget deficit
C
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Provide some real-world examples of price discrimination in action
What will be an ideal response?
Compared to workers in poor countries, workers in richer countries have
a. lower productivity but higher wages. b. higher productivity and higher wages. c. higher productivity but lower wages. d. the same productivity but higher wages.
Inflation _______ the risk involved in _______ contracts.
A. decreases; short-term B. decreases; long-term C. increases; long-term D. increases; short-term
Assume that a perfectly competitive firm faces a fixed wage rate of $4 and a constant per-unit cost of capital of $2. If the marginal product of labor and capital are 16 and 6, respectively, then to maximize profits the firm should
A. use relatively less labor. B. increase all inputs proportionately. C. decrease all inputs proportionately. D. use relatively more labor.