In the graph below, the price of capital is $500 per unit. At point A, the firm can exchange
A. 5 units of capital for 1 unit of labor and keep cost unchanged.
B. 5 units of capital for 1 unit of labor and keep output unchanged.
C. 1 unit of capital for 5 units of labor and keep output unchanged.
D. both b and c
E. none of the above
Answer: C
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A time-series graph reveals whether there is a ________, which represents ________
A) trend in a variable; a general tendency for the variable to rise or fall B) relationship between two variables; a cross-section relationship C) trends in two variables; unrelated variables D) relationship between two variables; a trend in a variable E) cross-section relationship; a general tendency for the variables to rise or fall
Private saving is defined as
A) private disposable income minus consumption. B) net national product minus consumption. C) private disposable income minus consumption plus interest. D) private disposable income minus consumption plus interest plus transfer payments.
The aggregate expenditure line is drawn on a graph that measures:
a. real GDP on the horizontal axis and aggregate expenditure on the vertical axis. b. aggregate expenditure on the horizontal axis and real GDP on the vertical axis. c. consumption on the horizontal axis and aggregate expenditure on the vertical axis. d. aggregate expenditure on the horizontal axis and consumption on the vertical axis. e. investment on the horizontal axis and aggregate expenditure on the vertical axis.
When the Fed wishes to reduce the economy's money supply, it
a. lowers the discount rate b. lowers the legal reserve requirement c. reduces the margin requirement d. sells some of its government securities e. prints more money