It is essential to establish specific criteria to judge the performance of any economic system. One such criterion is
A. profit opportunity.
B. achieving general equilibrium.
C. efficiency.
D. technological progress.
Answer: C
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Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the capital stock is $32,000 billion, and the current labor force is 120 million (or 0.120 billion) workers
All else equal, if the labor force increased by 20 million workers, the value of the marginal product of capital will be A) $0.0104. B) $0.0239. C) $0.0639. D) $0.0717.
In an Israeli factory, each worker can produce 2/5 of a shirt in an hour or 1/10 of a pair of pants in an hour. If there are 500 workers in the factory, what is opportunity cost of producing one pair of pants?
a. 1 shirt b. 4 shirts c. 1/2 shirt d. 1/4 shirt e. 2 shirts
What or who backs the value of fiat money?
a. The power of the state b. Gold and silver owned by the large commercial banks c. Foreign exchange held by the central bank d. Gold and silver owned by general public.
Keynes argued that ______ prevents the market solution from working rapidly enough to avert a(n) ______.
a. wage inflexibility; increase in the price level b. disinflation; prolonged inflationary gap c. low demand; unexpected positive shock d. wage inflexibility; prolonged recession