The production function displays
A) normal returns.
B) increasing returns.
C) diminishing returns.
D) average returns.
E) real returns.
C
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If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then according to the averaging equation, the value of price elasticity of demand in absolute terms is:
a. 0.33. b. 2.33. c. 0.25. d. 3. e. 0.66.
The measure of income received by persons from all sources is known as
a. personal income. b. national income. c. gross domestic product. d. net national product.
When expansionary monetary policy pushes real interest rates to an artificial low, the Austrian view of the business cycle predicts this will lead to
a. an increase in aggregate demand and a lengthy expansion in real output. b. a recession, followed by a strong and lengthy expansion in real output. c. malinvestment during an economic boom, followed by a recession. d. malinvestment during a temporary recession, followed by a strong and lengthy economic boom.
Which of the following statements describes the situation shown?
a. There is an incentive for capital funds to flow from the United States to the United Kingdom.
b. The equilibrium interest rate is 5 percent in the United States and 3 percent in the United Kingdom.
c. U.S. investors will be tempted by the interest rate in the United Kingdom.
d. Investors in the United Kingdom will be tempted to keep their funds in their own country.