Which of the following statements is correct? I. A drop in the foreign exchange value of the dollar would decrease aggregate demand II. A decrease in the amount of money in circulation would increase aggregate demand
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D
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If the Fed decided to reverse its policy actions implemented during the heart of the recession, the Fed would be acting to try to prevent
A) an increase in deflation. B) a decrease in unemployment. C) an increase in inflation. D) an increase in unemployment.
When 4 units of labor are employed, total product is 6 units; when 5 units of labor are employed, total product is 9 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 5th unit of labor?
A) $3 B) $5 C) $15 D) $45
Which of the following correctly describes the ceteris paribus assumption?
a. If we increase the price of a good, reduce consumer incomes, and lower the price of substitutes, and if quantity demanded is observed to fall, we know that the price increase caused that decline in quantity demanded. b. If the federal government increases government spending, and the Federal Reserve Bank lowers interest rates, we know that the increase in government spending caused unemployment to fall. c. If we decrease the price of a good and observe that there is an increase in the quantity demanded, holding all other factors that influence this relationship constant. d. If a company reduces its labor costs, negotiates lower materials costs from its vendors, and advertises, we know that the reduced labor costs are why profits are higher.
In the long run the monopolistic competitor
A. charges the same price but produces a greater output than the perfect competitor. B. charges a higher price but produces a smaller output than the perfect competitor. C. charges a higher price and produces a higher output than the perfect competitor. D. charges a lower price and produces a lower output than the perfect competitor.