Explain the two relations that determine the evolution of output in the long run
What will be an ideal response?
The amount of capital determines the amount of output being produced. The amount of output determines the amount of saving and in turn, the amount of capital being accumulated over time.
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Based on the production and revenue data in the above table, what is the price of the product?
A) $100 B) $10 C) $1 D) More information is needed to determine the price of the product.
Economic inefficiency of a monopoly is indicated by
A) P = ATCmin. B) P > MR. C) P > MC. D) MR = MC.
Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that
a. both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. b. both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. c. both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. d. both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.
Refer to the given data. Suppose the Fed wants to increase the money supply by $1,000 billion to drive down interest rates and stimulate the economy. To accomplish this, it could lower the reserve requirement from 20 percent to:
Answer the question on the basis of the following consolidated balance sheet of the
commercial banking system. Assume that the reserve requirement is 20 percent. All figures
are in billions and each question should be answered independently of changes specified in all
preceding ones.
A. 10 percent.
B. 12 percent.
C. 14 percent.
D. 15 percent.