What does the marginal product of labor curve indicate?
a. Change in output per hour increases at first and then reaches its lowest point when diminishing marginal product sets in.
b. Total output per hour increases at first as the staff grows and then begins to fall when too many employees are working.
c. Marginal product first rises as employees are added and then falls when the number of workers surpasses peak efficiency.
d. Average fixed costs are low at first, rise as employees are added, and then begin to fall toward, but never reach, zero.
c. Marginal product first rises as employees are added and then falls when the number of workers surpasses peak efficiency.
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Which of the following is likely to happen if the quantity of bank reserves held at the Fed increases?
A) The stock of money in the economy increases. B) The number of loans issued by banks decrease. C) Bank deposits decrease. D) The real interest rate increases.
Cost-benefit analysis can be applied to individual decision-making and public choice theory
a. True b. False Indicate whether the statement is true or false
In a booming economy, fiscal policy automatically becomes:
A. contractionary as tax rates rise and welfare payments fall. B. expansionary as tax rates rise and welfare payments fall. C. contractionary as tax rates fall and welfare payments rise. D. expansionary as tax rates fall and welfare payments rise.
When the Fed lowers the interest rate:
A. investment increases, and net exports decreases. B. both investment and net exports increase. C. both investment and net exports decrease. D. investment decreases, and net exports increase.