At the competitive firm's profit-maximizing quantity of labor:
A. the value of the last worker's marginal product is greater than or equal to marginal cost of that input.
B. the value of the last worker's marginal product is less than the marginal cost of that input.
C. marginal profits are always positive.
D. the average product of labor is equal to the wage rate.
A. the value of the last worker's marginal product is greater than or equal to marginal cost of that input.
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To close an expansionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. raises; decreases; increases B. raises; decreases; decreases C. raises; increases; increases D. reduces; increases; decreases
Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. The figure to the right shows the impact of this tariff. With the tariff in place, the United States produces
A. 25 million pounds of rice B. 10 million pounds of rice C. 31 million pounds of rice D. 15 million pounds of rice
Refer to the information provided in Figure 24.5 below to answer the question(s) that follow.
Figure 24.5Refer to Figure 24.5. If the economy is in equilibrium and the government increases spending by $100 billion and increases taxes by $100 billion, equilibrium aggregate output
A. increases by more than $100 billion. B. increases by less than $100 billion. C. does not change. D. increases by $100 billion.
Generally, economists believe that crowding out is
A. complete fiction. B. important but less than complete; one extra dollar of government spending decreases private spending by less than a dollar. C. actually reversed; one extra dollar of government spending increases private spending. D. complete; one extra dollar in government spending decreases private spending by a dollar.