The idea that the production function exhibits _______implies that ________
A) increasing returns; output should increase steadily as technology grows
B) constant returns; each additional unit of labor employed generates an increasing amount of real GDP
C) diminishing returns; the Lucas Wedge increases at output increases
D) increasing returns; potential GDP is always increasing
E) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP
E
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If the United States has a $300 billion net capital inflow, then there must be a:
A. trade surplus of $300 billion. B. trade surplus of $600 billion. C. net capital outflow of $300 billion. D. trade deficit of $300 billion.
One result of the financial meltdown of the late 2000s was that mortgage institutions ________ and ________ were brought under direct control of the government
A) Fannie Mae; Freddie Mac B) Lehman Brothers; FDIC C) Glass Steagall; Sarbanes Oxley D) Goldman Sachs; Morgan Stanley
In order to survive, cartels must be able to enforce contracts. However, when a cartel is trading in an illegal commodity:
a. it can use the judicial system to enforce contracts. b. it relies on altruism of members to enforce contracts. c. it is inherently stable because the market is underground. d. violence becomes a means of contract enforcement. e. authorities are effective in preventing the trade.
A natural experiment occurs when an endogenous event changes the environment in which individuals, families, firms, or cities operate.
Answer the following statement true (T) or false (F)