The demand curve for any input is the downward-sloping portion of its marginal revenue product curve
a. True
b. False
Indicate whether the statement is true or false
True
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The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. Unplanned inventory changes are zero when real GDP equals
A) $300 billion. B) $500 billion. C) $900 billion. D) $700 billion. E) $800 billion.
If the inflation rate target is 2%, the current inflation rate is 1%, and the output gap is minus 2%, then according to the Taylor rule, the nominal federal funds rate should be ________ percent
A) zero B) two C) four D) three E) none of the above
In the classical model, the level of business investment was a function of
a. only the expected profitability of investment projects. b. only the real interest rate. c. both the expected profitability of investment projects and the real interest rate. d. only the nominal interest rate. d. None of the above
Since air pollution creates a negative externality,
a. social welfare will be enhanced when some, but not all air pollution is eliminated. b. social welfare is optimal when all air pollution is eliminated. c. governments should encourage private firms to consider only private costs. d. the free market result maximizes social welfare.