If a firm employs an extra unit of labor, the additional product generated by employing the extra unit of labor is
A) the marginal physical product of labor.
B) the diminished marginal product.
C) the outside edge.
D) total product.
A
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Which of the following statements is not true of fixed and flexible exchange rate systems?
a. Under fixed exchange rates, government officials have little direct role in the foreign exchange market. b. Under fixed exchange rates, the government must select an appropriate exchange rate. c. Under fixed exchange rates, active central bank intervention is necessary to maintain the fixed exchange rate. d. Under fixed exchange rates, the governments must stand ready to buy all foreign exchange offered to it and supply all foreign exchange demanded from it. e. Flexible exchange rates rely on market forces to set the exchange rate, but fixed exchange rates are set by central banks.
According to monetarists, changes in velocity can
A) lower GDP B) raise GDP C) shift the SRAS, but not the LRAS D) a and b E) a, b and c
Using an approximation to the UIP eqaution to determine the spot exchange rate, assume that the expected spot rate (after 1 year) for euros (in terms of dollars)= $1.50, the current interest rate on euro deposits is 2% and the current interest rate on dollar deposits is 6%. What current spot for euros would satisfy the equation?
a) $1.5*(1+2%)= $1.53 b) $1.5*(1-2%)= $1.47 c) $(1.5/(1+4%)= $1.442 d) $(1.5/(1-4%)= $1.563
When economic profits are positive, accounting profits
A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero.