It is estimated that a 10 percent inflation in the United States would bear a shoe-leather cost of approximately ________ percent of GDP
A) 15
B) 6
C) 2
D) 0.25
D
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Suppose that, at a given production plan, the marginal product of labor is 6 and the marginal product of capital is 3. In a graph with labor on the horizontal and capital on the vertical axis, this implies that the technical rate of substitution at that production plan is
A. -1/2 B. -2 C. -18 D. None of the above
Average physical product measures the increase in total output that results from a one-unit increase in an input.
Answer the following statement true (T) or false (F)
When a central bank is acting as a lender of last resort, it is:
A. providing banks with Treasury bills for free. B. buying long-term Treasury bonds and selling short-term Treasury notes. C. buying Treasury bills directly from the public. D. providing banks with liquidity to meet their obligations.
Expansionary policy that followed the 2008 recession:
A. did not reduce unemployment as much as desired. B. led to higher inflation rates than expected. C. did not reduce the trade deficit as much as desired. D. led to higher growth rates than expected.