How is a production indifference map helpful?
What will be an ideal response?
A production indifference map is a graph whose axes show the quantities of two inputs that are used to produce some output. A curve in the graph corresponds to some given quantity of that output, and the different points on that curve show the different quantities of the two inputs that are enough to produce the given output.
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Refer to the above figure. The top two arrows of the figure refer to the product markets. The bottom arrows refer to the factor markets. Which arrow represents the final consumer goods and services?
A) Arrow A B) Arrow B C) Arrow C D) Arrow D
As GDP decreases during recessions, unemployment generally increases. Unemployment is therefore said to be procyclical
Indicate whether the statement is true or false
Assuming the Federal Reserve is targeting the interest rate, a decrease in money demand will
a. shift the LM schedule to the right. b. shift the LM schedule to the left. c. shift the IS schedule to the right. d. not shift the LM schedule. e. none of the above.
The greater is the absolute price elasticity of demand, the
A) larger is the responsiveness of quantity demanded to the price change. B) smaller is the responsiveness to a price change. C) larger is the income of the buyer. D) higher is the change in demand to an income change.