In the short run, a firm using variable labor and fixed capital inputs achieves the ________ level of output at the minimum point on its average total cost curve.
A. highest cost
B. only possible
C. least efficient
D. efficient
Answer: D
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Real GDP is $700 billion, average hours worked per week is 42 and aggregate hours 150 billion hours. What is the economy's labor productivity?
A) $1.80 per hour B) $3.75 per hour C) $16.67 per hour D) $46.67 per hour E) $4.50 per hour
The Fed controls bank lending and thus the process of money creation through its power to
A) alter legal reserve requirements and the dollar amount of reserves. B) establish maximum and minimum interest rates on bank loans and deposits made with banks. C) oversee the lending criteria banks use. D) suspend the charter of banks whose lending activities contribute to an excessive rate of increase in the money supply.
According to the Keynesian view, the proper response to a severe recession would be
a. an increase in taxes in order to reduce the budget deficit. b. an increase in government spending financed by borrowing. c. a shift toward a restrictive monetary policy to reduce aggregate demand. d. reliance on automatic stabilizers to direct the economy toward full employment.
The short-run is a period of less than one year.
Answer the following statement true (T) or false (F)