The demand for reserves increases as the price level rises because
a. people want money to buy goods that will appreciate with inflation.
b. people need more money to finance transactions.
c. the opportunity cost of holding money increases.
d. higher prices reduce the value of dollar assets.
b
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The ICP index:
A. uses a broad market basket that tries to represent the full cost of living across countries. B. is an imperfect measure because of cultural differences. C. is an imperfect measure because of typical weather and geographical differences. D. All of these statements are true.
Suppose a manager is deciding how to allocate workers between two plants. The marginal product of labor in plant 1 is 10 units of output. The marginal product of labor in plant 2 is 14 units of labor. What should the manager do?
A. Reallocate workers from plant 1 to plant 2, because MPL is greater in plant 1 than in plant 2. B. Reallocate workers from plant 1 to plant 2, because MPL is greater in plant 2 than in plant 1. C. Reallocate workers from plant 2 to plant 1, because MPL is greater in plant 1 than in plant 2. D. Reallocate workers from plant 2 to plant 1, because MPL is greater in plant 1 than in plant 1.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.
Which of the following would shift the FE line to the right?
A. An increase in the future marginal productivity of capital B. An increase in labor supply C. An adverse supply shock D. A decrease in the capital stock