What is productive efficiency?
A) a situation in which resources are allocated to their highest profit use
B) a situation in which resources are allocated such that goods can be produced at their lowest possible average cost
C) a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it
D) a situation in which firms produce as much as possible
Answer: B
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Fiat money is money:
A. accepted by law regardless of its intrinsic value. B. that is not included as part of the M1 money supply. C. that is backed by gold or silver held on reserve by the government. D. such as coins that are made from metal.
Which of the following is generally true of nominal wages?
Fill in the blank(s) with the appropriate word(s).
The case of New Zealand, described in the text, concludes that a country's current account deficits are not sustainable if a country's
A) prospects for long term economic growth are above its global deficit growth. B) ability to sustain current account deficits is questionable. C) unproductive industrial sectors and its prospects for long run growth. D) labor productivity is below that of most other countries. E) exchange rate has fallen relative to other currencies.
In a stock market boom ________
A) autonomous consumption might increase because stock holders might feel richer and consume more B) autonomous investment might increase because a higher stock value for a firm helps firms raise funds for increased investment C) the IS curve might shift to the right D) all of the above E) none of the above