When an economy relies on specialization,
A) the economy will generally produce only one product.
B) the economy will usually be heavily agricultural.
C) each individual in the economy produces the goods or services for which he or she has relatively the best ability.
D) each individual will be assigned by the government to produce that good or service the government believes the economy should specialize in.
C
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As a unit of account, money is used
A) to hold purchasing power over time. B) to define prices of all other goods. C) to pay off future debts. D) to exchange for goods and services.
When considering the velocity of money, the Federal Reserve is most concerned about its
A) stability. B) absolute size. C) determinants. D) sign.
The Cobb-Douglas production function for a beer manufacturer is q=1.52L0.6K0.4. If we assume that the firm's capital is fixed at 250 units and the rental rate of capital is $5 per unit, then average fixed cost is
A) $1250. B) $1250/q. C) 1.52L0.6(250)0.4. D) Unable to determine with information given.
Which of the following holds that business cycles are primarily due to changes in technology and does not invoke any monetary or demand-side forces?
A) the real business cycle theory B) the efficiency wage theory C) rational expectations hypothesis D) Keynesian economics