The opportunity cost of good A in terms of good B is equal to the
A) money price of good A minus the money price of good B.
B) money price of good B minus the money price of good A.
C) ratio of the money price of good A to the money price of good B.
D) ratio of the money price of good B to the money price of good A.
C
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The actual real wage must be below the equilibrium real wage in order to encourage firms to produce at any output level above the natural rate
Once workers realize this situation, their expected price level will gradually rise and they will demand a higher nominal wage. This description of a business cycle adjustment is part of which of the following theories? A) Classical model B) original Keynesian model C) Friedman fooling model D) the RBC model
If the federal government tries to make fiscal policy sustainable by decreasing expenditure on government capital goods, private capital goods will become ________ productive, and this will result in ________ potential GDP
A) more; lower B) more; higher C) less; lower D) less; higher
The government would challenge any merger in an industry if (i) the post-merger Herfindahl index would exceed 1,000, and (ii) the merger would increase the index by more than 100 points
Indicate whether the statement is true or false
If the MPS = 0.1, the multiplier would be:
A. 10. B. 1 C. 9 D. 0.9