In the macroeconomics long run...
What will be an ideal response?
there is full employment and real GDP is equal to potential GDP
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Differentiate between the process of defending an undervalued currency and an overvalued currency?
What will be an ideal response?
When the total product curve is drawn in a figure that measures employment along the horizontal axis, it is a graph that shows the
A) minimum cost of producing a given amount of output using different techniques. B) maximum profit attainable for each unit of output sold per unit of labor employed. C) maximum output attainable for each quantity of labor employed. D) minimum output attainable for each quantity of labor employed.
Zach Greinke's marginal product as a baseball player would be about the same as a Los Angeles Dodger and a Kansas City Royal. Why were the Dodgers willing to pay Greinke a higher salary than he was paid as a Royal?
A) The Dodgers needed a superstar to attract fans to their games. The Royals had no need to attract fans to their games. B) The owner of the Dodgers was under more pressure from the fans and the Los Angeles media to pay Greinke a higher salary than the Royals were willing to pay. C) The Dodgers play more home games than the Royals. As a result, the Dodgers earn more revenue from ticket sales that they can use to pay player salaries. D) Greinke's marginal revenue product is higher as a Dodger than it was as a Royal.
What is one implication of the real-balance effect?
A) The part of your wealth that you hold in the form of cash loses some of its value as the price level rises. B) When the price level rises, people have an incentive to work harder in order to earn a higher income. C) When the price level falls, most consumers reallocate their spending so as to have an equal balance between necessities and luxuries. D) Aggregate demand and aggregate supply can never reach long-run equilibrium.