In which case would the quantity of money demanded by the public tend to increase by the greatest amount?
a. The interest rate increases and nominal GDP increases
b. The interest rate decreases and nominal GDP decreases
c. The interest rate decreases and nominal GDP increases
d. The interest rate increases and nominal GDP decreases
c. The interest rate decreases and nominal GDP increases
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is
A. $72. B. $12. C. $36. D. $6.
A business cycle trough is a
A) small positive deviation from trend in real GDP. B) relatively large positive deviation from trend in real GDP. C) small negative deviation from trend in real GDP. D) relatively large negative deviation from trend in real GDP.
Average variable cost is
a. the change in cost as output decreases b. the change in cost as output increases c. TC / quantity of output d. TVC / quantity of output e. AFC + AVC