A cubic specification for a short-run production function is appropriate when the scatter diagram indicates
A. a ?-shaped marginal product of labor curve (MP first falls and then rises as labor usage increases.
B. total product is decreasing throughout the range of labor usage.
C. an S-shaped total product curve.
D. an S-shaped marginal product of labor curve.
E. marginal product of labor falls throughout the range of labor usage.
Answer: C
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Which of the following increases aggregate demand?
A) a decrease in taxes B) a decrease in foreign income C) a decrease in government expenditure D) a rise in the interest rate
Deleveraging is the process of reducing leverage, and therefore reducing the risk to capital from any further declines in asset prices
a. True b. False.
Given the following formula for the Taylor rule:Target federal funds rate = natural rate of interest + current inflation + 1/2(inflation gap) +1/2(output gap) if the current rate of inflation is 4%, natural rate of interest is 2%, and the target rate of inflation is 2%, and output is 3% above its potential, the target federal funds rate would be:
A. 4.5%. B. 7%. C. 8.5%. D. 5%.
An official agreement with another country to restrict the quantity of its exports to the U.S. is
A. a voluntary restraint agreement. B. a regional trade bloc. C. the quota system. D. a voluntary import expansion.