If the Fed wants to maintain current interest rates, it would be buying government bonds in the open market when
A) the demand for money increases.
B) investment demand decreases.
C) the discount rate increases.
D) the demand for money decreases.
Answer: B) investment demand decreases.
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The table above shows a nation's production possibilities frontier. The opportunity cost of a robot between combination D and E is
A) 1/4 of a pizza. B) 34 pizzas. C) 30 pizzas. D) 4 pizzas. E) undefined because neither point is production efficient.
If companies decrease investment spending because of lower expected returns on projects, forecasters should anticipate (everything else the same) that
A) GDP will rise. B) the money supply will fall. C) interest rates will fall. D) saving will increase.
The following OLS assumption is most likely violated by omitted variables bias:
A) E(ui Xi) = 0 B) (Xi, Yi) i=1,..., n are i.i.d draws from their joint distribution C) there are no outliers for Xi, ui D) there is heteroskedasticity
Suppose that in a computer factory, if there is 1 worker, 80 computers are produced per week. If there are 2 workers, 150 computers are produced per week. If there are 3 workers, 210 computers are produced per week
Given this information and the fact that the firm receives $200 per computer, the marginal revenue product of the third worker is A) $4,200. B) $12,000. C) $10,000. D) $14,000.