The marginal product curve:
A. typically decreases at low levels of input, but increases as input increases.
B. shows how many extra outputs are created with each additional input.
C. cannot be negative, since total output cannot be negative.
D. None of these is true.
Answer: B
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The slope in the above figure is
A) negative and increasing. B) negative and decreasing. C) positive and increasing. D) positive and decreasing.
The relative income hypothesis is associated with the ideas of
a. John M. Keynes b. Milton Friedman c. Franco Modigliani d. James Duesenberry e. Adam Smith
The major protection against sudden mass attempt to withdraw cash from banks is the:
A. Federal Reserve. B. Consumer Protection Act. C. deposit insurance provided by the FDIC. D. gold and silver backing the dollar.
Classicals argue that an adverse supply shock would
A. raise the natural rate of unemployment, but not the actual rate of unemployment. B. raise neither the natural rate of unemployment nor the actual rate of unemployment. C. raise both the natural rate of unemployment and the actual rate of unemployment. D. raise the actual rate of unemployment, but not the natural rate of unemployment.