If a competitive firm faces a competitive labor market, it will hire labor until
A) w = p.
B) w = MPL.
C) w = MPL ? p.
D) MPL = 0.
C
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In the current year, the CPI is 160 and during the previous year the CPI was 181. The inflation rate between these years is
A) 11.6 percent. B) -13.1 percent C) -013.1 percent. D) -11.6 percent. E) 13.1 percent.
The formula for the multiplier can be written as change in
A. Y/change in I. B. I/change in Y. C. Y/change in C. D. Y/change in GDP.
A good will tend to be more price elastic if it
a. is a luxury good. b. has no close substitutes. c. is a small part of the household budget. d. is a necessity.
When the economy is producing Real GDP at the level at which the LRAS curve intersects the AD curve the economy is
A) in a recessionary gap. B) in long-run equilibrium. C) in an inflationary gap. D) operating at less than full-employment output.