If strong fiscal policy stimulus is used to combat a recessionary gap, what will happen?
a. a rapid movement toward lower unemployment and higher inflation
b. a rapid movement toward lower unemployment and lower inflation
c. a slow movement toward lower unemployment and higher inflation
d. a slow movement toward lower unemployment and lower inflation.
a
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The effective return from a foreign investment is
A) the domestic interest rate plus the forward premium (discount). B) the foreign interest rate plus the forward premium (discount). C) the nominal interest rate minus inflation. D) the real interest rate.
Refer to Scenario 7.2. Suppose that you receive an order for 60 earthquake detectors. How much labor will you use to minimize the cost of 60 earthquake detectors?
A) 1 B) 5 C) 10 D) 45 E) none of the above
An increase in the amount of money in circulation would cause a
A) shift of the aggregate demand curve to the right. B) shift of the aggregate demand curve to the left. C) movement up the aggregate demand curve. D) movement down the aggregate demand curve.
Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, demand for inputs causes input prices to rise. It is likely that continued growth will result in:
A. economies of scale. B. reduced fixed costs. C. diseconomies of scale. D. increasing marginal returns.