If Rory McIlroy only earned $500 per hour playing golf instead of $1,000 per hour, what should he do?
A) He should be indifferent as to who does the weed-whacking, for the difference in hourly earnings would now be insignificant.
B) He should hire a less-productive gardener.
C) He should do the weed-whacking himself.
D) He should still hire the gardener.
D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
The Dot-Com bubble in the U.S. occurred due to: a. a rapid fall in the stock prices of manufacturing companies
b. a rise in housing prices relative to the rental cost of housing. c. a dramatic rise in the shares of stock in the South Sea Company. d. an unforeseen rise in the price of tulip bulbs which were the major exports of the U.S at that time. e. the exceptionally high price-to-earnings ratios of high-tech companies in the U.S.
Pete's Package Delivery Service currently makes deliveries only within the state, but now decides to expand the scale of its operation by serving the neighboring state as well. It is likely to find
a. total variable costs decline as diminishing returns set in b. total fixed costs decline as more trucks cover a wider area c. total variable costs rise as more fuel and drivers are needed d. the price of hiring a worker falls as more workers are hired e. profits rise as total costs remain constant
Of the following, which would not be considered an unconventional monetary policy approach?
A. Discount rate B. Policy duration commitment C. Credit easing D. Quantitative easing