Choose the letter below that best represents the type of shift that would occur in the following situation in the United States: During the late 1990s, productivity in many U.S. industries increased because of technological advances. (See Figure 8.6.)
A. A.
B. B.
C. C.
D. D.
Answer: B
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All else equal, the sooner a depreciation allowance is taken, ________.
A) the less likely the net present value of the investment will be affected B) the more likely the net present value of the investment will be negative C) the more likely the net present value of the investment will be positive D) the less likely the net present value of the investment will be positive
The idea of time inconsistency:
A. explains how it can be rational for someone to say he's going to eat a salad for dinner each night this week and end up eating pizza four out of five nights instead. B. explains how it can be rational for someone to pay more for something on his credit card than if he were to pay cash for the same thing. C. explains why people refuse to ignore only some sunk costs. D. Time inconsistency doesn't explain any of these behaviors.
In the equation for the production function Y/L represents
a. productivity. b. output. c. the availability of natural resources. d. the amount of human capital.
If economic data reveals that inflation is rising, the Fed:
A. does not need to know the state of real GDP growth in order to justify increasing the growth rate of the money supply. B. may increase the growth rate of the money supply without really knowing the state of real GDP growth. C. may reduce the growth rate of the money supply without really knowing the state of real GDP growth. D. will also at that time know the state of real GDP growth and can respond accordingly.