Why is it unlikely that expansions could be explained by a decrease in labor demand in the classical model?
a. It would be hard to say why productivity decreases.
b. Productivity increases are too fast and variable to explain expansions.
c. Productivity tends to improve at a constant and steady rate.
d. Only unexplained spending changes can lead to changes in output and employment, not the other way around.
e. Productivity improvements are rather slow.
E
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Suppose that George goes to his favorite ice cream store and buys three single -dip cones, the first for three dollars, the second for two dollars, and the third for one dollar, but enjoys no consumer surplus from the experience. We know that George must
a. have paid the same price for each cone b. have been cheated by the ice cream store-owner c. not like ice cream very much d. have paid prices for the cones that correspond to points on his demand curve e. not have maximized total utility that day
In a perfectly competitive industry, assume the short-run average total cost increases as the output of the industry expands. In the long run, the industry supply curve will:
a. first have a positive slope and then a negative slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical. e. have a positive slope.
An increase in the real rate of interest that can be earned on U.S. investments above the rate that can be earned on investments in India would:
a. increase the price of the dollar in Indian rupees. b. increase the supply of dollars by those holding U.S. dollars. c. decrease the equilibrium exchange rate of Indian rupees per dollar. d. all of these.