A firm should hire workers up to the point where
A) MP = P.
B) MFC = P.
C) MFC = MRP.
D) MP = MRP.
C
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The invention of new technology that can double the amount of gold extracted from raw ore will lead to a
A. higher world price of gold, since mining companies must pay for the new machinery. B. lower world price of gold, since any amount of gold output is now cheaper to produce. C. higher world price of gold, because miners’ wages must double as their productivity doubles. D. lower world price of gold, but only if new mining companies are not allowed to enter the industry.
Shortly after World War II (1941–45) and the price controls ended,
(a) unemployment levels returned to those levels experienced during the Great Depression. (b) unemployment levels returned to their full employment levels. (c) unemployment dipped sharply and inflation surged. (d) unemployment rates increased and deflation emerged.
The historical data on velocity shows that velocity for
a. M1 has fallen since 1929 and has become more stable since 1981. b. M1 has risen since 1949 and has become more volatile since 1981. c. both M1 and M2 have increased since 1949 but have become more stable since 1979. d. both M1 and M2 have declined since 1949.
An increase in the interest rate would induce people to
A. get rid of all their money and buy stocks with it. B. hold a smaller fraction of their wealth in the form of money. C. sell their least liquid assets and hold more money in case interest rates go up again. D. sell shares of stock and buy bonds, but would have no effect on their desire to hold money.