Lower profit expectations cause firms to ______.
a. cut capital spending
b. boost capital spending
c. hire more workers
d. increase wages for existing workers
a. cut capital spending
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The quantity of real GDP produced by one hour of labor is defined as
A) the advance in technology. B) economic growth. C) the growth rate of technology. D) real GDP per person. E) labor productivity.
Suppose Bob works for Mary as a proofreader. Mary and Bob fall deeply in love, marry, and have eight children. Bob stops working for Mary in order to care for the children. What will be the effect on GDP?
A) GDP will not change. B) GDP will increase. C) GDP will decrease. D) GDP may increase or may decrease depending on inflation.
The natural rate of unemployment is equal to the unemployment rate when there is only:
A. structural and cyclical unemployment. B. structural and frictional unemployment. C. frictional unemployment. D. cyclical unemployment.
Marginal revenue is the
A. added revenue that a firm takes in when it increases output by one additional unit. B. additional profit the firm earns when it sells an additional unit of output. C. ratio of total revenue to quantity. D. difference between total revenue and total costs.