The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Profits equal:
A) total revenue minus variable costs. B) revenue minus fixed costs. C) total revenue minus total costs. D) total revenue.
In the steady state of Solow's exogenous growth model, an increase in the growth rate of labor force
A) increases output per worker and increases capital per worker. B) increases output per worker and decreases capital per worker. C) decreases output per worker and increases capital per worker. D) decreases output per worker and decreases capital per worker.
The figure below shows the demand for meals at lunch and dinner for a proposed new restaurant. Suppose the marginal cost of a meal (both lunch and dinner) is constant at $10 per meal and marginal cost of providing the capacity is constant at $5 per meal. Once the managers have determined the profit-maximizing capacity, at dinner they will serve ________ meals and set a price of ________ per meal.
A) 200; $35 B) 800; $25 C) 200; $20 D) 600; $30
If a coupon bond has a "face value" of $1000, it means that
A) the original purchaser paid $1000 for it. B) each purchaser must pay $1000 for it. C) it was purchased for at least $1000 and perhaps more. D) the holder will be paid $1000 when the bond matures. E) the holder will be paid $1000 plus accumulated interest when the bond matures.