Which of the following is affected by changes in interest rates and, as a result, impacts aggregate demand?
A. Business investment projects
D. The value of the dollar
C. Consumption of durable goods
D. All of the above
D. All of the above
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Suppose that Federal Reserve policy leads to higher interest rates in the United States
How will this policy affect real GDP in the short run if the United States is a closed economy, and how will it affect real GDP in the short run if the United States is an open economy?
If the least-cost input combination doesn't include all inputs, it's called:
A. a boundary solution. B. an incomplete solution. C. an interior solution. D. an efficient solution.
Suppose a firm has a Cobb-Douglas weekly production function Q = F(L, K) = 25L0.5K0.5, where L is the number of workers and K is units of capital. The wage rate is $900 per week, and a unit of capital costs $400 per week. Assuming no fixed costs, what is the firm's total cost of production if it uses least-cost input combination to produce 675 units of output?
A. $48,600 B. $43,650 C. $35,100 D. $32,400
A monopolistic competitor is currently producing 2,000 units of output; price is $100, marginal revenue is $80, average total cost is $130, marginal cost is $60, and average variable cost is $60. The firm should
A. raise price because the last unit of output decreased profit by $30. B. lower price because the next unit of output increases profit by $20. C. keep the price the same because the firm is producing at minimum average variable cost. D. raise price because the firm is losing money.