An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Labor productivity is measured as:
a. the share of wages in national income. b. the change in labor to capital ratio. c. real output per labor hour. d. the change in output from hiring an additional unit of labor. e. the growth in the quantity of labor.
Three business people meet for lunch at an Indian restaurant. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. When the food is delivered to the table, each person faces incentives similar to the
a. consumption of a common resource good. b. production of a public good. c. consumption of a club good. d. production of a private good.
On average, over the last 50 years or so world trade has
a) increased faster than world output b) been primarily concentrated in agriculture c) been dominated by Middle East oil exports d) declined as nations closed their borders to imports e) been conducted almost exclusively over the internet
Under monetary neutrality, an increase in the money supply causes output to ________ and the price level to ________.
A. rise; rise B. not change; rise C. rise; not change D. not change; not change