Zach Greinke's marginal product as a baseball player would be about the same as a Los Angeles Dodger and a Kansas City Royal. Why were the Dodgers willing to pay Greinke a higher salary than he was paid as a Royal?
A) The Dodgers needed a superstar to attract fans to their games. The Royals had no need to attract fans to their games.
B) The owner of the Dodgers was under more pressure from the fans and the Los Angeles media to pay Greinke a higher salary than the Royals were willing to pay.
C) The Dodgers play more home games than the Royals. As a result, the Dodgers earn more revenue from ticket sales that they can use to pay player salaries.
D) Greinke's marginal revenue product is higher as a Dodger than it was as a Royal.
D
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According to aggregate demand and supply analysis, the favorable supply shock of 1995-1999 had the effect of
A) increasing aggregate output, lowering unemployment, and raising inflation. B) decreasing aggregate output, raising unemployment, and raising inflation. C) increasing aggregate output, lowering unemployment, and lowering inflation. D) decreasing aggregate output, raising unemployment, and lowering inflation.
A fixed or rigid price level implies
A) that income is fixed. B) real GDP is greater than nominal GDP. C) nominal GDP is less than real GDP. D) real GDP equals nominal GDP.
Assuming that the demand and supply of a good both decreased by the same amount, the new equilibrium would represent:
a. an increase in price and an increase in quantity exchanged. b. no change in price and an increase in quantity exchanged. c. a decrease in price and a decrease in quantity exchanged. d. no change in price, and decrease in quantity exchanged.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency remains the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. The GDP Price Index rises, and nominal value of the domestic currency rises. e. The GDP Price Index falls, and nominal value of the domestic currency rises.