Suppose the production function is given by Q = 2K + L. If w = $4 and r = $4, how many units of K and L will be utilized in the production process?
A. All L and no K.
B. All K and no L.
C. A combination of K and L not represented above.
D. Equal amounts of K and L.
Answer: B
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A government budget deficit is financed by a combination of
A) saving rising relative to domestic investment and imports rising relative to exports. B) saving rising relative to domestic investments and exports rising relative to imports. C) domestic investment rising relative to saving and imports rising relative to exports. D) domestic investment rising relative to saving and exports rising relative to imports.
If the money stock grows by 13 percent, and during that same time nominal GDP grows by 3.3 percent, what can we deduce happens to velocity during this period?
A. It remained constant. B. It rose. C. It fell. D. We cannot tell without knowing what happened to prices.
When Samsung put together a set of mobile apps with its smartphones, it was practicing
A. a loss leader. B. tie-in sales. C. compacting. D. bundling.