When the price level falls from 135 to 120, the aggregate level of GDP supplied falls from $140 billion to $125 billion. This ________ relationship represents the ________ relationship between GDP and the price level
A) negative; short-run
B) positive; short-run
C) negative; long-run
D) positive; long-run
Answer: B
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The risk-free rate is usually approximated by interest rates on U.S. government debt, because the US government:
A. is considered extremely unlikely to default. B. sets all policy concerning interest rates. C. backs all loans secured with that rate. D. will never default on a loan that it makes.
Firms will borrow to finance capital expansion until the MRP of the investment equals the
a. MRP of labor. b. marginal cost of the finished good. c. marginal physical product of capital. d. interest payment charged for borrowing.
The population of Omega totals one million people, 30 percent of whom are employed. Average output per worker in Alpha is $30,000. Real GDP per person in Alpha totals:
A. $21,000. B. $100,000. C. $9,000. D. $30,000.
The supply of workers in a particular occupation could be relatively small if:
A. training costs are high. B. job features are undesirable. C. there are few people with the required skills. D. All of these are correct.