The self-interest theory of government explains one motivation for limitations on taxes and government spending.
Answer the following statement true (T) or false (F)
True
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Which of the following would be included in the calculation of Gross Domestic Product (GDP)?
A) the value of spending on new machinery and equipment B) the value of the sale of 1,000 shares of IBM stock C) the value of transfer payments D) the value of the sale of a used guitar
If a dollar buys less coffee in the U.S. than in Kenya, then
a. the real exchange rate is greater than 1; a profit might be made by buying coffee in Kenya and selling it in the U.S. b. the real exchange rate is greater than 1; a profit might be made by buying coffee in the U.S. and selling it in Kenya. c. the real exchange rate is less than 1; a profit might be made by buying coffee in Kenya and selling it in the U.S. d. the real exchange rate is less than 1; a profit might be made by buying coffee in the U.S. and selling it in Kenya.
In the short run, a competitive firm has a marginal product of labor, MPL = 2L-0.25. The output price is $4 per unit and the wage is $5 per hour. The short-run labor demand curve for the firm is
A) 10L-0.25. B) 8L-0.5. C) 4L0.25. D) 8L-0.25.