Identify at least four important policy questions about the powers and limits of government economic policy that macroeconomics models are able to answer
What will be an ideal response?
First, can governments promote long-run economic growth? Second, can governments reduce the severity of recessions by smoothing out short-run fluctuations? Third, which is more effective to mitigating short-run fluctuations, fiscal policy or monetary policy? Fourth, is there a trade-off between lower rates of unemployment and higher rates of inflation? And finally, does government policy work best when it is announced or when it is a surprise?
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The stock of assets owned by a person, household, firm or nation is
A) real disposable income. B) wealth. C) capital investment. D) capital goods.
According to the general utility formula, the marginal utility of product A divided by the ____________ is equal to the marginal utility of product B divided by the _____________.
Fill in the blank(s) with the appropriate word(s).
The income elasticity of a necessity is between zero and one.
a. true b. false
Refer to the information. If the per-unit price of raw materials rises from $4 to $8 and all else remains constant, the per-unit cost of production will rise by about:
Answer the question on the basis of the following information. An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. A. 100 percent. B. 50 percent. C. 40 percent. D. 30 percent.