Refer to the diagram. If labor is the only variable input, the marginal product of labor is at a:
A. maximum at point a.
B. minimum at point a.
C. maximum at point b.
D. minimum at point b.
A. maximum at point a.
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If the income tax system were indexed, a person whose nominal income went up from $30,000 to $33,000 in a year when the price index rose by 10 percent would pay
a. no increases in nominal income taxes. b. no increases in real income taxes. c. lower taxes in both real and nominal terms. d. higher taxes in both real and nominal terms.
In the Keynesian transmission mechanism, if the money market is in the liquidity trap, an increase in the money supply will
A) cause total expenditures and aggregate demand to increase. B) cause total expenditures and aggregate demand to decrease. C) have no impact on total expenditures and aggregate demand. D) cause total expenditures to increase and aggregate demand to decrease. E) cause total expenditures to decrease and aggregate demand to increase.
What is a common source of leakage in the money creation process?
a. borrowers who deposit their loan money into a demand deposit account b. banks that choose not lend all their excess reserves c. banks that rapidly make new loans when additional funds are deposited d. borrowers who choose to spend the full amount of their loans
Refer to Figure 7.1. Which of the following are the combinations of movies and T-shirts that would exhaust the budget?
A. A and E B. C and F C. D and E D. A and G