Fiscal policy is most effective in influencing aggregate demand
A. under a fixed exchange-rate system without sterilization.
B. under a floating exchange-rate system with a high degree of capital mobility.
C. under a floating exchange-rate system with a low degree of capital mobility.
D. under a fixed exchange-rate system with sterilization.
Answer: C
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If the value of marginal product of a worker is $40 and the marginal product of the worker is 8 units, the market price of the good he produces is:
A) $2. B) $5. C) $8. D) $10.
The table above shows the balance sheet for Ralph's Bank. If the desired reserve ratio is 15 percent, Ralph's Bank has excess reserves of ________
A) $50 B) $500 C) $450 D) $2,500
Demand functions are "homogeneous of degree zero in all prices and income." This means:
a. a proportional increase in all prices and income will leave quantities demanded unchanged. b. a doubling of all prices will not alter consumption decisions. c. prices directly enter individuals' utility functions. d. an increase in income will cause all quantities demanded to increase proportionately.
Why is the level of output at which marginal revenue equals marginal cost the profit-maximizing output?
What will be an ideal response?