Refer to Figure 22-4. The movement from E to B to D in the figure above illustrates
A) diminishing returns to capital. B) a decline in capital per worker.
C) an improvement in technology. D) diminishing returns to labor.
C
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A country is said to be in balance of payments equilibrium, when the sum of its current and its
A) non-reserved capital accounts equals zero. B) reserved capital accounts equals zero. C) non-reserved capital accounts equals to the surplus in the capital account. D) non-reserved capital accounts equals to the deficit in the capital account. E) non-reserved capital accounts is higher than the total capital account balance.
If the Fed injects reserves into the banking system and they are held as excess reserves, then the money supply
A) increases by only the initial increase in reserves. B) increases by only one-half the initial increase in reserves. C) increases by a multiple of the initial increase in reserves. D) does not change.
The equation E$/£ = 2 means that:
a. one dollar buys 2 pounds. b. one dollar buys 1/2 a pound. c. 2 pounds buy one dollar. d. one dollar buys one pound.
The real rate of interest can be defined as the
A. the market rate of interest expressed in today's dollars. B. nominal interest rate less the anticipated rate of inflation. C. anticipated rate of inflation less the nominal interest rate. D. nominal rate of interest less the unanticipated rate of inflation.