A temporary supply shock, such as a drought, would
A. decrease both the marginal product of capital and the marginal product of labor in the long-term future.
B. increase the marginal product of capital and increase desired investment.
C. have little or no effect on desired investment.
D. decrease the marginal product of capital and decrease desired investment.
Answer: C
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In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
A. recession B. expansion C. trough D. peak
Refer to the scenario above. Which country has the highest income per capita in PPP dollars?
A) Country 1 B) Country 2 C) Country 3 D) Country 4
Inflation burdens those individuals living on fixed incomes
Indicate whether the statement is true or false
If all resources were perfectly adaptable for alternative uses, the production possibilities curve would
A) be bowed out. B) be bowed in. C) be a straight line. D) not exist.