Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect:
A. present consumption to rise.
B. future consumption to fall.
C. a lower rate of growth of real GDP.
D. labor productivity to rise.
D. labor productivity to rise.
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Producing where marginal revenue equals marginal cost is equivalent to producing where
A) total revenue is equal to total cost. B) total profit is maximized. C) average fixed cost is minimized. D) average total cost equals average revenue.
Which of the following groups rejects the view that government policy can reduce the rate of unemployment even in the short run because that policy would be undermined by people's incorporation of the anticipated consequences of the policy into their present decisions?
a. classical school b. Keynesian school c. neo-Keynesian school d. rational expectations school e. supply-side school
Which of the following most accurately states the function of middlemen?
a. Middlemen reduce transaction costs. b. Middlemen add to the expense of buyers and sellers without providing any benefit. c. Our economy would work just as well without middlemen since they do not expand the availability of physical goods. d. Middlemen reduce the number of transactions since they increase the buyer's price and reduce the seller's net receipts.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete
equilibrium. a. The real risk-free interest rate rises and nominal value of the domestic currency remains the same. b. The real risk-free interest rate falls and nominal value of the domestic currency remains the same. c. The real risk-free interest rate and nominal value of the domestic currency remain the same. d. The real risk-free interest rate rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.