The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that
A. expansion of output in one industry means expansion cannot occur in another industry.
B. expansion of output in one industry means output in another industry must contract.
C. output cannot be increased in any industry.
D. output of all industries must contract until more resources are found.
Answer: B
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The demand for capital by a firm is based on the demand for the product that the capital produces. This relationship is referred to as
A. cost minimization. B. resource utilization. C. derived demand. D. product demand.
Why must the spot price equal the futures price on the settlement date?
What will be an ideal response?
Which of the following statements is most correct if the Fed sees no need to engage in expansionary monetary policy?
A. It will be impossible for the Fed to shrink its balance sheet. B. Eventually, the Fed will shrink its balance sheet by letting securities it holds expire. C. The Fed is likely to increase the size of its balance sheet. D. The Fed will likely shrink its balance sheet rapidly.
Suppose an economy consists of 500,000 individuals 16 years and older, 260,000 are employed, and 21,000 are unemployed but actively seeking work. In this example the unemployment rate is approximately:
A. 4.2 percent. B. 6.1 percent. C. 7.5 percent. D. 8.0 percent.