A market basket:
A. only includes housing, food, and clothing, but not things like transportation.
B. looks like a really long shopping list for what firm's typically purchase.
C. includes specific goods and services in fixed quantities that roughly correspond to a typical consumer's spending.
D. is what an economist creates in order to understand purchasing trends of households and firms.
Answer: C
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How many units of land would you hire?
The long run is a period of:
A. at least one year. B. sufficient length to allow a firm to expand output by hiring additional workers. C. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production. D. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.
Identify at least four important policy questions about the powers and limits of government economic policy that macroeconomics models are able to answer
What will be an ideal response?
Refer to the diagrams, in which AD 1 and AS 1 are the "before" curves and AD 2 and AS 2 are the "after" curves. Other things equal, a decline in productivity is depicted by:
A. panel (A) only.
B. panel (B) only.
C. panel (C) only.
D. panels (B) and (C).