Diminishing marginal returns do not exist for increases in
A) capital stock.
B) labor.
C) total factor productivity.
D) Diminishing marginal returns exist for all of the above answers.
C
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An open market purchase of T-bonds by the Fed causes the money supply to
a. fall and bond prices to fall. b. rise and bond prices to fall. c. rise and bond prices to rise. d. fall and bond prices to rise.
It is ________ difficult to effectively time fiscal policy than monetary policy because ________
A) more; fiscal policy can be quickly decided and changed B) more; fiscal policy takes longer to implement C) less; monetary policy takes longer to decide and change D) less; monetary policy takes longer to implement
Positive economics seeks to understand behavior, but not make judgments.
Answer the following statement true (T) or false (F)
Suppose Regretta Sigh becomes the lucky winner of a $10,000,000 state lottery jackpot after purchasing a single $1.00 lottery ticket. How does her lucky expenditure affect current GDP?
A) GDP rises by $1.00. B) GDP rises by $9,999,999. C) GDP rises by $10,000,000. D) GDP rises by $10,000,001. E) GDP rises by the present value of the total cash prize.