When aggregate demand is lower than expected, inventories decline and the rate of unemployment falls
a. True
b. False
Indicate whether the statement is true or false
False
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The real business cycle theory holds that business fluctuations are caused by
A. "stop-and-go" monetary policies. B. factors affecting aggregate demand. C. significant changes in technology and resource availability. D. incorrectly anticipated government stabilization policies.
Suppose that a firm can invest $100 today in a project and receive $105 a year from today. There is no inflation, and the annual interest rate in the economy is 6%. The firm should
A) invest in the project because the opportunity cost is greater than the return on the investment. B) not invest in the project because the opportunity cost is greater than the return on the investment. C) invest in the project because the opportunity cost is less than the return on the investment. D) invest in the project because the opportunity cost is the same as the return on the investment.
Explain reasons that may make payments based on marginal productivity have widely varied results.
What will be an ideal response?
Compared to workers in richer countries, workers in developing countries have
A. lower productivity and lower wages. B. higher productivity and higher wages. C. higher productivity but lower wages. D. the same productivity but lower wages.