The shape of a firm's long-run average cost curve is determined by:
a. the degree to which each input encounters diminishing marginal productivity.
b. the underlying nature of the firm's production function when all inputs are able to be varied.
c. how much the firm decides to produce.
d. the way in which the firm's expansion path reacts to changes in the rental rate on capital.
b
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Explain the exchange rate over-shooting hypothesis
What will be an ideal response?
A company that produces baseball gloves is considering buying some new equipment that it expects will increase future profits. If the interest rate rises, then the present value of these future profits
a. rises. The company is more likely to buy the equipment. b. rises. The company is less likely to buy the equipment. c. falls. The company is more likely to buy the equipment. d. falls. The company is less likely to buy the equipment.
In 1995 House Speaker Newt Gingrich threatened to send the United States into default on its debt. During the day of this announcement, U.S. interest rates rose and the real exchange rate of the U.S. dollar depreciated. Which of these changes is consistent with the results of the open-economy macroeconomic model?
a. the increase in U.S. interest rates b. the depreciation of the real exchange rate of the U.S. dollar c. Both a and b are consistent. d. Neither a nor b are consistent.
Nursing home workers, poultry processing workers, and janitorial workers all have jobs in the
A. primary labor market. B. secondary labor market. C. neither the primary nor the secondary labor market.