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 GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions become more negative (or less positive).
b. There is not enough information to determine what happens to these two macroeconomic variables.
c. The GDP Price Index rises, and current international transactions become more positive (or less negative).
d. The GDP Price Index and current international transactions remain the same.
e. The GDP Price Index falls, and current international transactions become more negative (or less positive).
.A
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If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:
a. there isn't enough room in the factory. b. there isn't an infinite number of workers. c. wages would have to increase. d. they stop when MRP = wage e. marginal revenue product will become negative.
We calculate many different kinds of price indexes:
A. in order to capture a complete picture of how price changes are affecting the economy. B. to see how the prices of different groups of goods are changing. C. to measure how different groups of people in the economy are being affected by changing prices. D. All of these statements are true.
Daniel owns a coffee kiosk. All of his employees work 8 hours per day. In 2011, he employed 6 people who produced a total of 912 cups of coffee each day. In 2012, he hired a seventh employee and production increased to 1008 cups of coffee each day. In Daniel's kiosk, productivity
a. increased by about 10.5 percent b. increased by 9.5 percent c. decreased by about 5.6 percent d. decreased by about 5.3 percent
Suppose there is a permanent shift of consumer preferences away from pretzels and toward potato chips. The most likely result would be
A. in the short run, economic losses in the potato chip market. B. in the short run, a rise in the price of pretzels. C. in the long run, a fall in the supply of potato chips. D. short-run profits in the potato chip market increase.