A $250 million decrease in government spending causes
A. a larger change in a closed economy than in an open economy.
B. a larger change in an open economy than in a closed economy.
C. an equal amount of change in equilibrium output in an open and a closed economy.
D. a larger change in a closed economy than in an open economy if the MPM is zero.
Answer: A
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Entry into the information technology industry becomes more attractive the more firms there are because of the increased availability of already trained workers. Given this trend, it appears that information technology is
a. an increasing-cost industry. b. a constant-cost industry. c. a decreasing-cost industry. d. a government subsidized industry.
The price of a given basket of goods in Year 1 was $1,300. The price of the same basket of goods in Year 2 was $1,560. The consumer price index for Year 2 taking Year 1 as the base year is ________
A) 120 B) 156 C) 100 D) 101
Riley deposits $4,000 cash in her checkable deposit at Fershur Bank. If the desired reserve ratio is 5 percent, Fershur Bank's
A) desired reserves increase by $4,000. B) liabilities do not change but its assets increase. C) excess reserves increase by $4,000. D) desired reserves increase by $200 and its excess reserves increase by $3,800. E) assets and its liabilities change in opposite directions.
To a firm facing constant input prices, increasing marginal returns
a. means that each additional unit of output costs more to produce than the previous unit b. means that the marginal product of the variable input decreases as more of the input is used c. can occur due to specialization and division of labor d. usually occur at very high rates of output e. can never occur