Which one of the following does NOT contribute to economic growth?
A. the growth of the capital stock
B. increases in the price level
C. the growth of the labor productivity
D. the growth of capital
Answer: B
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The U.S. economy remains subject to frequent boom and bust cycles. Throughout U.S. history, policymakers after the Great Depression often
(a) raise or lower taxes and spending to adjust aggregate demand and thereby smooth the business cycle. (b) take a hands-off approach to the business cycle. (c) consult with world organizations on how to address cyclic fluctuations. (d) close economies to international trade.
In the long run,
A. both monopolists and perfectly competitive firms produce at minimum long-run average total cost. B. a monopolist will exit the industry if he or she is earning zero economic profit. C. a monopolist will always charge a higher price than he or she charges in the short run. D. consumer surplus is smaller if an industry is a monopoly than if it is perfectly competitive.
As the price level falls, buyers require less money for their purchases and the demand for money falls. A decrease in the demand for money will cause business investment to increase. This is called the _____
a. interest rate effect b. exchange rate effect c. wealth effect d. accelerator effect
If a demand curve goes through the point P = $6 and Qd = 400, then
A. $6 is the highest price consumers will pay for 400 units. B. $6 is the lowest price consumers can be charged to induce them to buy 400 units. C. 400 units are the most consumers will buy if price is $6. D. consumers will buy more than 400 if price is $6. E. both a and c