Inflation is measured by an increase in:
a. homes, autos and basic resources.
b. prices of all products in the economy.
c. the consumer price index (CPI).
d. none of these.
c
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The President proposes a reduction of personal income marginal tax rates in the United States. When marginal tax rates are reduced, there is
A) a decrease in the magnitude of the expenditure multiplier. B) an increase in the magnitude of the expenditure multiplier. C) a decrease in the marginal propensity to consume. D) no change in the slope of the AE line. E) an increase in the marginal propensity to consume.
Assuming a market price of $4, fill in the columns in the following table. What is the profit-maximizing level of production? What are the two ways to determine the profit-maximizing level of production?
Quantity Total Revenue (TR) Total Cost (TC) Profit Marginal Revenue (MR) Marginal Cost (MC) 0 3 1 5 2 6 3 9 4 14 5 20 6 28 7 40
Suppose that the production function for the economy is Y = AK0.2L0.8. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 1, the marginal product of labor is
A) $0.80. B) $1.06. C) $1.32. D) $5.26.
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.