If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the:
A. supply of labor to the XYZ-TV Company increases.
B. demand for labor by the XYZ-TV Company increases.
C. supply of labor to the XYZ-TV Company decreases.
D. demand for labor by the XYZ-TV Company decreases.
Answer: D
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One problem with using monetary policy to address "bubbles" in asset markets is that:
A. reducing the real interest rate to deal with the bubble could lead to inflation. B. the Federal Reserve is better than financial-market professionals at identifying bubbles. C. monetary policy is not a very good tool for addressing the problem of inappropriately high asset prices. D. the Federal Reserve is not interested in stabilizing output.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Does the law of diminishing returns apply to capital as well as labor? Explain why or why not
What will be an ideal response?
Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."
What will be an ideal response?