If U.S. real GDP increases by 3.3 percent, we can infer that the United States experienced:
A. a recession
B. an expansion
C. a depression
D. a trough
Ans: B. an expansion.
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If an individual borrows $100 at an annual rate of interest of 5%, how much interest will he have to pay at the end of a year?
A) $20 B) $10 C) $50 D) $5
Assume there is an improvement in technology that increases the marginal product of each unit of labor. This would have the effect of:
A) reducing the average total cost, average variable cost, and marginal cost of production. B) increasing the average total cost, average variable cost, and marginal cost of production. C) reducing the average variable cost and marginal cost of production, but average total cost would be unchanged. D) reducing the average total cost and average variable cost of production, but marginal cost would be unchanged.
If the price of one good increases, and as a result the demand for another good increases, the goods are
A) substitutes. B) normal goods. C) complements. D) inferior goods.
Demand sensitivity depends on all of the following except:
a. how low is the price of the good. b. the sensitivity of firms' output to changes in its price. c. the consumer's income. d. the availability and closeness of substitutes. e. the amount of time a consumer has to adjust to price changes.