Which of the following is a true statement?
A. Firms and resource suppliers generally find it easier to reduce prices than to raise them.
B. As the price level increases, interest rates will rise and therefore consumption and
investment spending will also rise.
C. An initial increase in aggregate demand may cause a further increase in aggregate
demand because higher prices mean higher incomes.
D. A decline in aggregate demand will primarily affect real output and employment if prices
are inflexible downward.
D. A decline in aggregate demand will primarily affect real output and employment if prices
are inflexible downward.
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Why might developing countries hesitate to accept the conclusion that countries should specialize according to their comparative advantage? What dynamic gains might offset their objections?
What will be an ideal response?
If a firm hires its fourth worker for $5 and its fifth worker for $8, then
a. the firm is a monopolist. b. the firm must be substituting capital for labor. c. the fifth worker must have been less productive than the fourth. d. the firm is not maximizing its profit. e. the labor market is not perfectly competitive.
One reason why gold and silver have served as money is that they
A. are easy to produce. B. are easy to duplicate. C. are durable. D. All of these responses are correct.
Government policies that support education and job training cause:
A. A decrease in GDP per capita, since dollars are not being spent on output. B. An increase in the size of the labor force. C. An increase in productivity. D. An increase in the ratio of capital to labor