If the demand effect dominates during a currency depreciation, then
a. real GDP should fall.
b. real GDP should increase.
c. the price level should fall.
d. net exports should decrease.
b
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Refer to Scenario 1-3. Using marginal analysis terminology, what is another economic term for the incremental cost of producing the last 400 t-shirts?
A) operating cost B) explicit cost C) marginal cost D) Any of the above terms are correct.
A firm uses an efficiency wage scheme to deter workers from shirking. A risk-neutral worker will not shirk if
A) the expected loss from being fired is larger than or equal to the gain from shirking. B) the expected loss from being fired is smaller than the gain from shirking. C) the gain from shirking is positive. D) the expected loss from being fired is zero.
According to traditional Keynesian analysis, fiscal policy operates by
A) informing consumers and business people about its plans for the economy so they will know how to adjust their behavior. B) indirectly affecting aggregate demand through its effect on interest rates. C) directly affecting aggregate demand. D) directly affecting aggregate supply.
A firm's cost curve is determined by
A) congressional laws. B) whether the firm hires engineers or not. C) natural laws. D) the firm's production function.