In Econland, 500,000 of the 2 million people in the country are employed. Average labor productivity in Econland is $15,000 per worker. Real GDP per person in Econland totals:
A. $3,750.
B. $11,250.
C. $60,000.
D. $1,250.
Answer: A
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When the CPI increases from 200 in 2010 to 210 in 2011 and the nominal wage rate is constant at $10 an hour, the real wage rate ______
A. increases by 10 percent B. increases to $15 an hour C. decreases by 5 percent D. is $10 an hour
Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. If there is a decrease in the supply of good X, which of the following will happen in the market for good Y in the long run?
A) Firms will exit, causing market price to rise. B) Firms will enter, causing market price to fall. C) Price will be higher at the new long-run equilibrium as a result of entry into the market. D) The firms that were already in the industry will continue to earn positive economic profit.
A hard peg may be achieved by all of the following except
A) following the rules of the Bretton Woods Agreement. B) dollarization. C) establishing a currency board. D) mutual agreements establishing a common currency.
The law of diminishing marginal returns states that as the quantity of capital per worker increases, other things constant, output per worker eventually: a. increases at a constant rate
b. increases at a decreasing rate. c. increases at an increasing rate. d. decreases. e. remains constant.