A decrease in the price of capital relative to the price of labor is likely to result in a substitution of capital for labor in the production process
a. True
b. False
Indicate whether the statement is true or false
True
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Every component of M2 is a component of M1, but not all the components of M1 are included in M2
a. True b. False Indicate whether the statement is true or false
If the United States economy were operating on its production possibilities frontier, it would have the best chance of quickly and temporarily reaching point F if
A. we were at war.
B. we were in a depression.
C. we were in a period of inflation.
D. we invested more in plant and equipment.
An economy suffering from high inflation despite low economic growth and high unemployment is experiencing:
A. an economic boom. B. an economic downturn. C. hyperinflation. D. stagflation.
The impact of a decrease in expected inflation in the bond market will have a relatively large effect on the prices of bonds prices because the bond demand curve:
A. will shift right as will the bond supply curve. B. will shift left as the bond supply curve shifts right. C. and supply curves will shift left. D. will shift right but the bond supply curve shifts left.