Which of the following mechanisms helps output to return to potential after a supply shock?
a. A change in the nominal wage
b. Changes in business decision making strategies
c. Changes in the capital stock
d. The rigidity of the price level
e. Changes in inventories
A
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The above figure depicts the Edgeworth box for two individuals, Al and Bruce. If the endowment is at point a, and Al has no ability to bargain, the final allocation will be at point
A) a. B) b. C) c. D) d.
Policy directives used by the Fed to moderate swings in the business cycle are considered
a. moderating fiscal policy b. countercyclical monetary policy c. accelerating monetary policy d. reserve requirement rates e. federal funds policy
Refer to the above figure. The curve reflects
A) the law of diminishing marginal product in labor. B) the law of diminishing marginal product in capital. C) the law of increasing marginal product in labor. D) the law of increasing marginal product in capital.
What happens to the demand for Xbox games if the price of an Xbox falls?
A) The demand for Xboxes decreases because the price of a substitute falls. B) The demand for Xboxes increases because the price of a complement falls. C) The demand for Xboxes decreases because the price of a complement falls. D) The demand for Xboxes remains unchanged.