As a nation's average education level increases, the nation's level of productivity
A. Decreases, and the nation's production possibilities curve shifts to the left.
B. Increases, and the nation moves to a new point on the same production possibilities curve.
C. Increases, and the production possibilities curve shifts to the right.
D. Decreases, and the nation moves to a new point on the same production possibilities curve.
Answer: C
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Based on the above table, the reserve ratio for the banking system is
A) 1 percent. B) 15 percent. C) 20 percent. D) 10 percent.
Consider an identical basket of goods in both the U.S. and Taiwan. For a given nominal exchange rate, in which case is it certain that the U.S. real exchange rate with Taiwan falls?
a. the price of the basket of goods rises in the U.S. and Taiwan. b. the price of the basket of goods rises in the U.S. and falls in Taiwan. c. the price of the basket of goods falls in the U.S. and rises in Taiwan. d. the price of the basket of goods falls in both the U.S. and Taiwan.
With constant returns to scale and factor prices invariant with the amount of factors used, the long-run output expansion path is
A. zero. B. a straight line. C. horizontal. D. U-shaped.
One piece of evidence in favor of the efficiency wage model is that some sectors of the economy pay relatively high wages, whereas other sectors pay lower wages. This supports the efficiency wage model as it seems to provide evidence of what?
A. High-wage firms take advantage of delayed-compensation contracts. B. Workers voluntarily provide bonds in case they are caught shirking. C. Unemployment is constant across sectors. D. Dual labor markets exist. E. There are compensating differentials being paid depending on the type of work being done.