Figure 17-1
Which of the following is true about the economy depicted in Figure 17-1?
a.
Tax incentives are being used to stimulate aggregate supply.
b.
Policy makers believe the costs of unemployment are higher than the costs of inflation.
c.
Contractionary monetary policy is being enacted to fight inflation.
d.
Prices are rising but real GDP is falling.
b
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How can government best promote domestic industry?
What will be an ideal response?
Bob works for a firm that produces umbrellas. He receives payment for his labor. The firm wants to expand but lacks the capital needed for the expansion. Bob, a person of some means, provides the capital. What market(s) are these payments made in?
a. illegal market b. goods and services market c. product market d. resource market e. umbrella market
To answer the question, refer to the following figure, showing the marginal revenue product (MRP) and the average revenue product (ARP) curves of a perfectly competitive firm hiring a single variable input, labor.
If the wage is $20, how many workers will the firm hire?
A. 200 B. 175 C. zero D. 225
Which of the following statements is true about the U.S. economy?
A. The United States produces less than one-third as much as Japan does. B. The United States produces less than half as much as China does. C. The United States has the world's third largest economy. D. The United States produces nearly one-fifth of the world's production.