When comparing partial-equilibrium effects to general-equilibrium effects, one can conclude that
A) general-equilibrium effects are always larger.
B) partial-equilibrium effects are always larger.
C) the effects are of equal size.
D) one cannot determine before the fact which effect is greater.
D
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The aggregate expenditure model focuses on the ________ relationship between real spending and ________.
a. short-run; real GDP b. short-run; inflation c. long-run; real GDP d. long-run; inflation
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and reserve-related (central bank) transactions become more positive (or less negative). b. The real risk-free interest rate rises, and reserve-related (central bank) transactions become more negative (or less positive). c. The real risk-free interest rate rises, and reserve-related (central bank) transactions remain the same. d. The real risk-free interest rate and reserve-related (central bank) transactions remain the same. e. The real risk-free interest rate falls, and reserve-related (central bank) transactions become more negative (or less positive).
When prices rise,
a. real estate is a better unit of account than money. b. money is a worse medium of exchange than real estate. c. money is a better store of value than real estate d. real estate is a better store of value than money.
The law of diminishing marginal returns states:
a) As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the marginal product of the variable factor eventually diminishes. b) As a firm uses more of a variable factor or production, total product eventually decreases. c) As the size of a firm?s plant increases, average cost eventually decreases. d) As the size of a plant increases, marginal product eventually decreases. e) As a firm uses more of a variable factor of production, its average cost eventually decreases.