Real business cycle theory focuses on factors affecting
A. aggregate demand.
B. the velocity of money.
C. aggregate supply.
D. consumer spending.
Answer: C
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As the real interest rate rises, the quantity of loanable funds supplied ________ and the quantity of loanable funds demanded ________
A) does not change; does not change B) decreases; decreases C) increases; decreases D) increases; increases E) decreases; increases
Allocative efficiency is achieved when the production is such that
A) the marginal benefit exceeds the marginal cost by as much as possible. B) marginal cost equals zero. C) marginal benefit is equal to marginal cost. D) the production point is on the PPF. E) None of the above is true.
Comfy Clothing is thinking of hiring Tom. If hired, he can increase total production by 100 units a week. He would cost the firm $1,500 a week in wages. If the price of each unit is $20,
a. The MR of hiring the worker is $1,500 b. The MC of hiring Tom is $1,500 c. The firm should hire Tom since MR>MC d. All the above
Assume both the demand for bagels and the supply of bagels increase. Which of the following outcomes is certain to occur?
A. The equilibrium quantity of bagels will rise. B. The equilibrium quantity of bagels will fall. C. The equilibrium price of bagels will fall. D. The equilibrium price of bagels will rise.