When an economy faces diminishing returns
A) the slope of the per-worker production function becomes steeper as capital per hour worked increases.
B) the per-worker production function shifts to the left.
C) the slope of the per-worker production function becomes flatter as capital per hour worked increases.
D) the per-worker production function shifts to the right.
C
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What will be an ideal response?
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What will be an ideal response?
Assume a money multiplier of 3. If the Treasury finances a $30 million expenditure by selling securities to the Fed, the money supply could ultimately
A) rise by $3 million. B) rise by $10 million. C) rise by $30 million. D) rise by $90 million.
Suppose the real gross domestic product (GDP) equals $100 billion this year and the nominal gross domestic product (GDP) is $200 billion. This implies that the price level has increased by _____
a. $200 billion b. 50 percent c. $100 billion d. 100 percent e. 200 percent