An increasing returns to scale production function could be quasiconcave.
Answer the following statement true (T) or false (F)
True
Rationale: Quasiconcavity just implies that upper contour sets of isoquants are convex -- and it is certainly possible to have regularly shaped isoquants but increasing returns to scale.
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How are the following transactions entered into the U.S. balance of payments?
(a) The U.S. government sends $2,000 worth of food aid to Africa. (b) A U.S. firm exports $10,000 worth of goods to the United Kingdom, payable in 3 months. (c) A U.S. tourist in Amsterdam spends $200 for food and hotels.
Advocates of the active approach argue that even when there is a large contractionary gap,
a. the downward renegotiation of wages necessary to increase the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output. b. the upward renegotiation of wages necessary to decrease the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output. c. the upward renegotiation of wages necessary to decrease the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output. d. the downward renegotiation of wages necessary to decrease the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output.
A large negative output gap
a) represents a shortage of goods due to excessive demand for output b) is the result of overtime work by the labor force c) creates inflation d) means the business cycle is at a peak e) implies excessive unemployment
During the 1990s, Canada had an average inflation rate of 1.5 percent while Columbia had an average inflation rate of 21.5 percent. You would expect that nominal interest rates in Canada are
A) unpredictably different from nominal interest rates in Columbia. B) greater than nominal interest rates in Columbia. C) less than nominal interest rates in Columbia. D) not comparable to nominal interest rates in Columbia. E) equal to nominal interest rates in Columbia.