A rightward shift in potential real GDP is not likely to result from which of the following?
A. a discovery of new oil reserves
B. workers' acquisition of new skills
C. retirement of a large and aging segment of the workforce
D. an improvement in technology
Answer: C
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Everything else equal, if the dollar depreciates against the Chinese yuan:
A) China will stop trading with the U.S. B) China will import more from the U.S. and will export less to the U.S. C) China will export more to the U.S. and will import less from the U.S. D) the Chinese government will buy yuan from the foreign exchange market.
While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail,
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy. B) there will be less competition in the U.S. economy, which could led to higher prices for consumers. C) smaller firms will resent not receiving similar assistance. D) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail.
Which of the following would NOT be a result of a contractionary monetary policy?
A) Interest rates would rise. B) Foreign goods would become more expensive to U.S. residents. C) Net exports would decline. D) Imports would rise.
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65 . In the long run, the firm should
a. Shut down since price is greater than average cost b. Continue operating price is higher than average cost, its making a profit c. Continue operating as the firm is covering all the variable costs and some of the fixed costs d. Shut-down because it is cost effective to pay off the remaining fixed costs