Why does increased productivity lead to sustained economic growth?
a. Increased productivity means that a population, and thus the labor supply, has increased.
b. Increased productivity means a given amount of resources can be used to produce more.
c. Greater productivity means a nation has adopted more sustainable practices.
d. Once increased, productivity cannot decline, meaning its results are sustainable.
b. Increased productivity means a given amount of resources can be used to produce more.
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Only one of the following statements is correct. The statements compare perfectly competitive (PC) markets and monopolistically competitive (MC) markets. Which statement is correct?
A) Productive efficiency is achieved in both PC and MC markets. Allocative efficiency is achieved only in MC markets. B) Allocative efficiency is achieved only in PC markets. Productive efficiency is achieved only in MC markets. C) Productive efficiency and allocative efficiency are both achieved in PC markets. Neither is achieved in MC markets. D) Allocative efficiency is achieved in both PC and MC markets. Productive efficiency is achieved only in PC markets.
Why is it important that consumers respond differently to temporary and permanent increases in their incomes?
A) This implies that consumption will be highly sensitive to temporary changes in income. B) This implies that a temporary tax cut will have a larger effect than a permanent one on current consumption. C) this tells us that the timing of income increases for consumers is irrelevant. D) this has implications for the relative effects of temporary and permanent tax cuts.
The figure below shows the retail demand for running shoes. If the distributors (the retailers) are perfectly competitive and the marginal cost of distributing the shoes is $20 per pair, the manufacturer's wholesale demand curve lies
A) $20 above the retail marginal revenue curve, MR.
B) $20 below the retail demand curve, D.
C) $20 below the retail marginal revenue curve, MR.
D) $20 above the retail demand curve, D.
Which of the following statements about the structure of the Fed is an advantage from the perspective of conducting monetary policy?
A) The two policymaking bodies of the Fed are deliberately large to allow for different viewpoints and they work very closely with other political institutions. B) The two policymaking bodies of the Fed are deliberately large to allow for different viewpoints and they work relatively independently of other political institutions. C) The two policymaking bodies of the Fed are small to allow deliberations in private and they work relatively independently of other political institutions. D) The two policymaking bodies of the Fed are small to allow members to work closely with other political institutions.