As disposable income rises, autonomous C ______ as a percentage of total C.
A. declines
B. stays the same
C. rises
A. declines
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When labor is a firm's only variable input in its production process, a profit-maximizing firm will continue to employ additional workers as long as: a. the marginal product of labor > 0
b. the marginal revenue product of labor < the marginal resource cost. c. the marginal revenue product of labor > the marginal resource cost. d. none of the above.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more negative (or less positive). b. Real GDP and current international transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. Real GDP falls, and current international transactions become more negative (or less positive). e. Real GDP rises, and current international transactions remain the same.
In a Floating Exchange Rate system:
(a) The government intervenes to influence the exchange rate. (b) The central bank intervenes to fix the exchange rate. (c) The exchange rate adjusts to equate the supply and demand of the currency. (d) None of the above
Which of the following is not an example of a transfer payment?
A. social security. B. unemployment benefits. C. workman's compensation. D. sales tax.