Suppose real money demand is 1000, real output is 6000, and the price level is 200. What is the level of velocity in this economy?
A. 12
B. 2
C. 3
D. 6
Answer: D
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One reason why, in the short run, the marginal product of labor might increase initially as more workers are hired is that
A) beyond some point, a firm has hired too many workers. B) specialization allows a worker to focus on one task, thereby increasing her proficiency at that task. C) the best workers are hired first and later hires are not as skillful. D) the first workers hired get to use the best equipment.
An advantage of discretionary policy might be that ________
A) it has been shown to be more efficient than rules B) it is more flexible than rules C) it requires a binding plan in advance to deal with economic problems D) all of the above E) none of the above
A loan is said to be productive if it
a. increases the purchasing power of the borrower. b. increases the present utility of the borrower’s possessions. c. ultimately costs less to repay than it was worth when borrowed, due to inflation. d. increases the borrower’s total output and profits.
What effect, if any, does diminishing marginal product have on the shape of the marginal cost curve?