Which of the following is the most likely explanation for the behavior of private inventories between September 2007 and September 2009, as depicted in Figure 19.1?
A) a substantial decline in the desired level of inventories, due to a slump in aggregate demand
B) a substantial decline in the desired level of inventories, as improvements in technology have reduced the size of inventories needed to support both production and customer deliveries
C) an unanticipated draw-down of inventories as the economy was growing much faster than expected
D) a substantial decline in the desired level of inventories, as changes in the tax code increased the cost of holding inventories
A
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Suppose that the cost of the CPI basket of goods and services rises from $137 in 2010, which is the base year, to $159 in 2011. The CPI in 2011 is ________ and the inflation rate from 2010 to 2011 is ________
A) 86; 14 percent B) 86; 22 percent C) 116; 22 percent D) 116; 16 percent E) There is not enough information to answer this question.
Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will ________ in Alpha compared to Beta, holding other factors constant.
A. increase output by the same amount B. increase output less C. have no effect on output D. increase output more
Which of the following would shift the long-run aggregate supply curve to the right?
A. The elimination of job training programs. B. The elimination of government-subsidized college loans. C. A decrease in the marginal propensity to save. D. Political and economic stability.
Since the year 1959, the poverty rate has
A. increased very slightly. B. increased significantly. C. decreased significantly. D. remained almost unchanged.