How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L0.5K0.5?
A) L = 5
B) L = 2.5
C) L = 200
D) L = 2.25
A
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If money demand decreases due to greater use of credit cards, which of the following would most likely happen under a neutralization policy?
a. The money supply would decrease, real GDP would not change, and neither would the interest rate. b. The money supply would increase, real GDP would not change, and neither would the interest rate. c. The money supply would decrease, real GDP would increase, and the interest rate would decrease. d. The money supply would increase, real GDP would not change, and the interest rate would decrease. e. The money supply would decrease, real GDP would decrease, but the interest rate would not change.
If the price of rubber (an input to the production of tires) increases:
A. the supply of tires will decrease. B. the supply of tires will increase. C. the demand for tires will decrease. D. the demand for tires will increase.
Very few people in Kyle’s country have more than a sixth-grade education. In contrast, 80 percent of the people in Carmen’s country have at least a high school diploma. Based on this information, which statement about these two countries is most likely true?
a. Carmen’s country has limited physical capital. b. Carmen’s country has a higher rate of economic growth than Kyle’s country. c. Kyle’s country has a higher birthrate than Carmen’s country. d. Carmen’s country has higher per capita output than Kyle’s country.
A cost shock, such as a natural disaster, leads to stagflation.
Answer the following statement true (T) or false (F)