When new technologies are applied to the production and distribution of goods and services:
A. average labor productivity decreases.
B. diminishing returns to capital no longer hold.
C. diminishing returns to capital still hold.
D. scarcity is eliminated.
Answer: C
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Exhibit 10-3 Aggregate supply and demand curves
In Exhibit 10-3, the change in equilibrium from E1 to E2 represents:
A. deflation. B. demand-pull inflation. C. price-push inflation. D. cost-push inflation.
Inflation is an economic problem because it
A) leads inevitably to unemployment. B) makes prices less useful as signals for resource allocation. C) leads to recession. D) results in rapid increases in the money supply.
Which entity produces the greatest proportion of U.S. gross national product?
A) government B) non-profit organizations such as hospitals C) firms D) universities
A graph illustrating the relationship between the quantity of money demanded and the interest rate would have a slope that is:
a. positive. b. negative. c. horizontal. d. vertical.