Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal staying open 2 hours per day
If she is following the marginal principle, what must her marginal benefit be?
A) $6 B) $12 C) $15 D) $18
B
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Suppose the country of Tiny Town experienced frictional unemployment. This frictional unemployment would
A) definitely signal that the country is in a recession. B) be considered a natural occurrence in a growing economy. C) signal that there are more job leavers than job losers. D) signal that the number of discouraged workers is growing.
An increase in the domestic interest rate relative to other interest rates should
A) increase net exports. B) increase investment spending. C) decrease consumption spending. D) increase government spending.
If a country that fixes its exchange rate has an undervalued exchange rate, then it will ________ reserves, unless it ________ its money supply to the appropriate level
A) gain; increases B) lose; increases C) lose; decreases D) gain; decreases
In the Keynesian model, a decline in interest rates will cause investment to
A) increase. B) decline. C) remain unchanged. D) move erratically, depending on the interest rate effect on saving.