As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases.
B. initially decreases, then increases.
C. decreases.
D. initially increases, then decreases.
Answer: A
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How does expansionary monetary policy affect net exports?
A) Expansionary monetary policy reduces exports and increases imports. B) Expansionary monetary policy reduces exports and reduces imports. C) Expansionary monetary policy increases exports and reduces imports. D) Expansionary monetary policy increases exports and increases imports.
Suppose that U.S. mining companies purchase German-made ore trucks at a reduced price. By itself, what effect will this purchase have on the GDP deflator and on the consumer price index?
a. The consumer price index and the GDP deflator will both fall. b. The consumer price index and the GDP deflator will both be unaffected. c. The consumer price index will fall, and the GDP deflator will be unaffected. d. The consumer price index will be unaffected, and the GDP deflator will fall.
The tendency of changes in asset prices to affect spending on consumption goods is called the ________ effect.
A. multiplier B. wealth C. income D. substitution
The Marginal Product of Labor is
A) the change in total product resulting from an extra unit of labor, holding other factors constant. B) the ratio of output to the number of workers used to produce that output. C) the amount of output that can be produced by a given amount of labor. D) equal to the marginal product of labor when the average product is increasing.