A learning curve may be stated as L = A + BN-b where L is the labor per unit and N is the cumulative number of units produced. Learning does not occur when
A) b = 0
B) b = 1
C) b > 0
D) b < 0
A
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The economy needs some unemployment to operate efficiently, because without it
A) workers will find it difficult to find a job, leading to reduced wages and prices. B) firms will find it difficult to recruit workers, leading to increased wages and prices. C) firms will find it difficult to recruit workers, leading to reduced wages and prices. D) workers will find it difficult to find a job, leading to increased wages and prices.
Suppose that the Fed purchases $1,000,000 worth of bonds and that the reserve ratio is 25 percent. Then, the maximum potential expansion of deposits is
A) $4,000,000. B) $400,000. C) $25,000,000. D) $10,000,000.
Refer to Figure 7-3. What is the reduction in value of consumer surplus after the imposition of the quota?
A) $8 million B) $26.25 million C) $27.75 million D) $30 million
A case for capital inflow controls can be made because capital inflows
A) can cause a lending boom and lead to excessive risk taking. B) never finance productive investments. C) always finance productive investments. D) are less likely to cause financial crises than regulation of banking activities.