When the marginal product of labor is declining, marginal costs are ______.
a. rising
b. falling
c. zero
d. steady
a. rising
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Advocates of flexible exchange rates claim that under flexible exchange rates, if the central bank faced unemployment
A) and thus wished to decrease its money supply, there would no longer be any legal barrier to the currency depreciation this would cause. B) and thus wished to expand its money supply, there would no longer be any legal barrier to the currency depreciation this would cause. C) and wished to expand its money supply, there would no longer be any legal barrier to the currency appreciation this would cause. D) and wished to decrease its money supply, there now would be a legal barrier to the currency depreciation this would cause. E) and wished to increase output, there would no longer be a legal barrier to the currency appreciation this would cause.
In recent decades, a primary source of long-run growth in U.S. output has been:
A. Increased capacity utilization. B. A reduction in structural unemployment. C. Increased output per worker. D. Rapid growth of the money supply.
Which of the following statements is true?
A. National income is total income earned by households whereas personal income is total income received by households (including transfer payments). B. Disposable personal income equals personal income plus personal taxes. C. The expenditures approach yields a higher GDP value than the income approach. D. The expenditures approach yields a lower GDP value than the income approach.