Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.
What will be an ideal response?
The improvement in technology will boost the productivity of Joe's employees. Their MRP will rise, and since Joe's labor demand curve is the MRP curve, he will be willing and able to hire more workers and pay higher wage rates.
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Which of the following is TRUE about exchange rates?
A) They should not be volatile because they will determine the economic climate. B) They are generally more volatile than stock prices. C) They are more volatile than several underlying factors that move them such as money supplies and fiscal variables. D) They should be volatile because to correct price signals they adjust quickly in response to economic news, but they are generally less volatile than stock prices. E) They never overreact to economic news.
If a bond offers $400 in interest payments at the end of each of next 3 years and a repayment of $2,000 also at the end of the 3 years and the current discount rate is 5 percent, what is the market price for the bond?
A) $2,593 B) $3,589 C) $2,256 D) $2,817
A monopolist always selects a price on the elastic portion of its demand curve
a. True b. False Indicate whether the statement is true or false
Modern mainstream macroeconomists agree with the monetarists that:
A. the Fed should increase the money supply at a fixed annual rate. B. velocity is highly stable. C. fiscal policy is largely ineffective. D. "money matters" in the macroeconomy.