Countries with high labor costs tend to:
a. rely on only one method for the production of goods
b. use more labor rather than capital in the production process.
c. use more capital rather than labor in the production process.
d. be relatively poor countries.
Ans: c. use more capital rather than labor in the production process.
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If the economy's real GDP is growing at 3 percent each year and velocity is constant, for the price level to increase:
a. the money supply would have to grow at more than 3 percent per year. b. the money supply would have to grow at exactly 3 percent per year. c. the money supply would have to grow at less than 3 percent per year. d. the money supply would have to remain stable.
Briefly explain the four rationales for efficiency wages
A foreign resident increasing her holdings of a U.S. financial asset will be recorded as a debit item in the financial account of the U.S. balance of payments.
Answer the following statement true (T) or false (F)
Economics is the study of
A. how to invest in the stock market. B. the role of money in markets. C. how government officials decide which goods and services are produced. D. how society uses limited resources.