Economics is the study of the allocation of scarce resources and scarce time, and the ways in which people utilize those resources or that time
a. True
b. False
Indicate whether the statement is true or false
True
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Suppose that the production function for the economy is Y = AK0.5L0.5. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 3, the equilibrium real rental price of capital is
A) $0.33. B) $0.75. C) $1.00. D) $2.22.
Which of the following actions would cause the aggregate demand curve to shift to the left?
A) an increase in consumer spending caused by a cut in the personal income tax rate B) an increase in government spending caused by increased spending on highways and bridge construction C) a decrease net export spending caused by an appreciation of the home currency D) an increase in exports caused by an increase in economic activity in the European Union
Which of the following is a partially valid economic argument for restricting free trade?
a. Restrictions on foreign trade will increase employment and permanently reduce unemployment. b. Infant industries may need temporary protection to develop and gain productive efficiency. c. A nation needs to protect its national defense; hence, it should restrict some products that threaten an industry considered vital to its defense. d. Both b and c are correct.