If input prices are constant, a firm with increasing returns to scale can expect
A) costs to double as output doubles.
B) costs to more than double as output doubles.
C) costs to go up less than double as output doubles.
D) to hire more and more labor for a given amount of capital, since marginal product increases.
E) to never reach the point where the marginal product of labor is equal to the wage.
C
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Countries tend to be classified as more or less developed based on
a. the literacy rate. b. the poverty rate. c. the level of income per capita. d. the types of goods they produce.
Suppose that the Federal Reserve conducts an open market sale. Everything else held constant, this will cause the demand for U.S. assets to ________ and the U.S. dollar will ________
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate
What is purchasing power parity? Why might it not hold?
What will be an ideal response?
The inflation rate can be obtained by ________
A) dividing the nominal GDP by the GDP deflator B) subtracting the real GDP from the nominal GDP C) multiplying the CPI by GDP D) subtracting the growth in real GDP from the growth in nominal GDP E) none of the above