In analyzing macroeconomic data during the past year, you have discovered that average labor productivity fell, but total output increased. What was most likely to have caused this?
A) There is nothing unusual in this outcome because this is what normally occurs.
B) The capital—output ratio probably rose.
C) There was an increase in labor input.
D) Unemployment probably increased.
C
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A theory of aggregate economic fluctuations called real business cycle theory holds that
A) changes in the real money supply are the only demand shocks that affect the natural rate of output. B) aggregate demand shocks do affect the natural rate of output. C) aggregate supply shocks do affect the natural rate of output. D) changes in net exports are the only demand shocks that affect the natural rate of output.
The classical economists believed that
a. labor supply is upward sloping because the income effect is greater than the substitution effect. b. labor supply is upward sloping because the substitution effect is greater than the income effect. c. labor supply is downward sloping because the income effect is greater than the substitution effect. d. in equilibrium, the marginal product of labor must exceed the real wage. e. both b and d.
The above figure shows the market for rice in Japan where price is expressed in dollars. S represents the domestic supply curve, and the horizontal line at P = $1 represents the world supply curve. Currently Q1 units are imported
The loss from shifting production from foreign to domestic producers equals A) c + e B) i. C) e. D) a + c + d + e.
Which of the following will most likely happen if there is a surplus of money?
a. Fewer people will invest in treasury bills. b. Fewer people will exchange money for CDs. c. More people will transfer money from high interest saving accounts to checking accounts. d. More people will exchange money for bonds.