The long-run trend in real GDP is upward. How is this possible given business cycles? What explains the upward trend?
There are occasional short-lived periods of negative real GDP growth. However, in most years real GDP increases. The years of increase are more frequent and the increases large enough that over long periods of time real GDP increases despite the occasional declines. The long-run upward trend in real GDP is due to increases in the labor force and capital stock and advances in technological knowledge.
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From which of the following goods is it most difficult to exclude free riders?
A) Tickets for the Newport Jazz Festival B) Food and beer sold at the Newport Jazz Festival C) Programs and souvenirs sold at the Newport Jazz Festival D) A radio simulcast of the Newport Jazz Festival
Adele wants to buy a house at a fixed mortgage rate, Zen wants to buy a luxury vehicle with his savings, Fang wants to buy stocks of a blue-chip company with his salary, and Zayeda wants to book an apartment with the money she won in a lottery. If the Fed had implemented a contractionary monetary policy that is still effective, _____ is likely to be most adversely affected
a. Zayeda b. Fang c. Adele d. Zen
All else equal, if there are diminishing returns, then what happens to productivity if both capital and labor increase?
a. Productivity will definitely fall. b. Productivity will definitely be unchanged. c. Productivity will definitely rise. d. None of the above are necessarily correct.
The profit maximizing output level for a perfectly competitive firm is always where
A. P = AVC. B. MC = ATC. C. MC = AVC. D. P = MC.