If business inventories decrease below desired levels, then it is most likely that a
A. Higher price level will occur.
B. Lower level of output will occur.
C. Recessionary gap will occur.
D. Higher level of unemployment will result.
Answer: A
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The opportunity cost of money is:
A. the price level. B. the time spent going to the bank to withdraw funds. C. the nominal interest rate. D. the fees charged by banks to provide checking services.
Research supporting the new Keynesian model finds that prices are ________
A) slow to adjust to aggregate demand shocks B) changed very frequently C) changed only infrequently D) not as flexible as wages
Supposed actual investment is greater than planned investment at the current level of output in 2010. Given this information, we know that
A) GDP will tend to increase over time. B) firms' stock of inventories must have increased unexpectedly in 2010. C) saving must be less than planned investment. D) saving must be equal to planned investment.
The original comparative advantage model that used the relative abundance of factors of production to explain comparative advantage assumed that countries:
a. employed all four factors of production; land, labor, capital, and entrepreneurship. b. employed only two factors of production; labor and capital. c. employed only two factors of production; land and entrepreneurial ability. d. worked with a fixed capital stock. e. were free to vary their employment of only one factor of production; labor.