The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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Vertical contracts that aim to decrease retailer prices typically
a. Benefits the consumers, manufacturers and retailers b. Hurts all the manufacturers, consumers and retailers c. Benefit the manufacturer, hurt the consumer and retailer d. Benefit the retailer, hurt the manufacturer and consumer
Let the marginal product of labor and capital be denoted by MPL and MPK respectively. The price of labor and capital are given by PL and PK respectively. Which of the following equations gives the condition for producing a given level of output at the least cost combination of inputs?
a. PL × PK = MPL × MPK b. PL × MPL = PK × MPK c. MPL ÷ PK = MPK ÷ PL d. PL ÷ PK = MPL ÷ MPK
Assume a U.S. firm invests $1,500 to buy a one-year U.K. bond. What is the dollar value of the proceeds if the dollar return on the U.K. bond is 20 percent at maturity?
a. $1,800 b. $1,500 c. $1,200 d. $1,000 e. $500
Matt and Ann both decide to go to a concert with free tickets. We know that
A) both bear an opportunity cost since they could have done other things instead of see the concert. B) both bear the same opportunity cost since they are doing the same thing. C) the cost of going to the concert is greater for the one who had more choices to do other things. D) neither bears an opportunity cost because the tickets were free.