A reason a nation faces diminishing returns along a production function is because
A) unemployment always exists.
B) potential GDP is fixed.
C) the quantity of physical capital is fixed.
D) full employment is not possible.
E) the wage rate is fixed while moving along the production function.
C
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Expenditure switching refers to
A) a switching back and forth between investment and consumption expenditures. B) a switching back and forth between domestic and foreign goods in response to changes in the exchange rate. C) a switching back and forth between domestic and foreign goods in response to changes in the interest rate. D) a switching of back and forth in the current account from a deficit to a surplus and vice versa. E) All of the above.
Which of the following events shifts the aggregate-demand curve leftward?
a. A decrease in government expenditures, but not a change in the price level. b. An increase in government expenditures or a decrease in the price level c. A decrease in government expenditures or an increase in the price level. d. An increase in the price level, but not a decrease in government expenditures.
Nathan received a $50 gift certificate to a bookstore a year ago. The economy has been in an inflationary period for the last year. This gift certificate is
A. adjusted in terms of the CPI. B. expressed in real terms and is worth more. C. not expressed in either real or nominal terms since it is not money. D. expressed in nominal terms and is worth less.
An example of a monopoly based on control of a key resource is
A) Major League Baseball. B) NASA. C) Microsoft's Windows operating system. D) the U.S. Food and Drug Administration.