To close a recessionary gap, the Fed would
A) decrease the money supply.
B) increase interest rates.
C) sell bonds.
D) increase the money supply.
D
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Consider a consumer with preferences for consumption of a composite good (C) and leisure (L) given by the following utility function:
U(C,L) = 2C1/2 + L Denote the consumer's wage rate by w and total time available for labor and leisure is normalized to one. The price of consumption is one. Denote the amount of labor supplied as N, so that N + L = 1. The consumer also earns non-labor income ("allowance") of 0. a. Write out the budget constraint determining feasible allocations of leisure and consumption. b. Compute the optimal bundle of leisure and optimal bundle of consumption. c. Derive the consumer's labor supply function: N*(w, ). d. Determine the effect of increasing non-labor income on the supply of labor (that is, compute the relevant partial derivative). e. How does non-labor income affect the consumption of the composite good, C? f. Compute the effects of an increase in wage on consumption and labor supply. Is leisure a normal good?
Long-term economic growth requires a permanent:
a. decline in the average price level. b. leftward shift of the vertical Phillips curve. c. rise in the natural rate of unemployment. d. leftward shift of the aggregate demand curve. e. rightward shift of the vertical aggregate supply curve.
If a company is producing 2 units of output and the fixed costs are €25 and the variable costs are €100, what is the average total cost of producing two units?
(a) €50. (b) €12.50. (c) €62.50. (d) €25.
What is the value of $F (the total new checkable deposits)?
A) $1,000 B) $4,000 C) $5,000 D) $6,000