The bowed shape of the per-worker production function is caused by
A. increasing marginal productivity of capital.
B. wealth effects that reduce labor supply.
C. diminishing marginal productivity of capital.
D. increasing marginal productivity of labor.
Answer: C
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The deposit expansion multiplier is increased if the Federal Reserve
A) buys government securities. B) sells government securities. C) lowers reserve requirements. D) raises reserve requirements.
The aggregate supply curve:
a. shows the level of real GDP produced in the economy at different possible price levels during a period of time. b. is horizontal in the Keynesian range. c. is vertical in the classical range. d. all of these.
The market-demand curve for a product in a perfectly competitive market:
a. is horizontal. b. is downward sloping. c. is vertical. d. has elasticity equal to 1. e. is positively sloped.
Value maximization means
A) that managers make decision so as to increase the long-run market value of the financial claims on the firm. B) that a firm should make products that have the highest price. C) that managers make decision so as to increase the short-run market value of the financial claims on the firm. D) all of these choices.