An increase in a nation's wealth causes its:
a. Aggregate demand to fall, the average price level to fall, and real GDP to rise.
b. Aggregate supply to rise, the average price level to rise, and real GDP to rise.
c. Aggregate demand to rise, the average price level to rise, and real GDP to rise.
d. Aggregate supply to fall, the average price level to rise, and real GDP to fall.
e. Aggregate demand to fall, the average price level to fall, and real GDP to fall.
.C
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Refer to Figure 2-12. What is the opportunity cost of producing one gallon of milk in Bora Bora?
A) 1.5 gallons of honey B) 0.8 gallons of honey C) 1.125 gallons of honey D) 2/3 of a gallon of honey
Suppose a firm uses labor and capital to produce output. The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units
Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit. The price of capital is A) $2. B) $10. C) $20. D) impossible to determine with the information given.
Unemployment insurance
a. may improve the ability of the economy to match workers with appropriate jobs. b. reduces the job search efforts of the unemployed. c. increases the amount of frictional unemployment in the economy. d. All of the above are correct.
The purpose of an effluent fee is to
A. reward people producing externalities. B. correct for pollution while keeping the price of the good the same as before the correction. C. reduce the amount produced of a good and to raise the market price. D. encourage producers to keep the quantity produced the same while lowering the price.