In the equation of exchange, if velocity is stable in the long run,
A. %?V is a positive constant value > 0.
B. %?V = infinity.
C. %?V = 1.
D. %?V = 0.
Answer: D. %?V = 0.
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The text argues that if avocado growers in Mexico can produce avocadoes cheaper than avocado growers in the United States, this will not reduce total jobs available in the United States. The logic underlying this argument is that
A) avocado growers in the United States did not earn much anyway. B) avocado growers in the United States are welcome to emigrate to Mexico. C) avocado growers in the United States will switch to specializing in a crop in which they hold the comparative advantage. D) avocado growers in Mexico need the jobs more than Americans do.
Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?
A. The real GDP figures are a better measure of changes in the general level of prices. B. The real figures will reflect changes in the quantity of output and not changes in the general level of prices. C. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output. D. The real GDP figures adjust for changes in the level of employment.
A decrease in the marginal factor cost of labor will
A) lead to an decrease in the quantity demanded of labor. B) induce a firm to hire fewer workers. C) induce a firm to hire more workers. D) cause the value of the marginal product of labor to decrease.
As a larger fraction of the working-age population becomes older and retires,
A. the employment-population ratio increases. B. the labor-force participation rate increases. C. the labor-force participation rate declines. D. the unemployment rate decreases.