If the marginal revenue product of land is greater than its price, a firm should
A. decrease the price it is willing to pay for land.
B. use more land.
C. use less land.
D. try to decrease the productivity of land.
Answer: B
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Traveler's checks are included in
A) M1 only. B) M2 only. C) both M1 and M2. D) neither M1 nor M2.
In the country of Darrowby, net domestic income at factor cost is $2.0 million. Gross domestic product is $3.0 million, and depreciation is $0.5 million. Indirect taxes less subsidies ________
A) are $1 million B) are $0.5 million C) cannot be calculated D) are -$0.5 million
A nation running a persistent balance of payments deficit while part of a fixed exchange rate system would have to __________ international reserves in an effort to prevent its currency from __________
A) amass; appreciating B) amass; depreciating C) pay out; appreciating D) pay out; depreciating
A value of the absolute price elasticity of demand equal to 0.25 indicates that
A) a 5% decrease in price leads to a 2% increase in quantity demanded. B) a 2% decrease in price leads to a 25% increase in quantity demanded. C) a 1% decrease in price leads to a 2.5% increase in quantity demanded. D) a 0.25% decrease in price leads to a 1% increase in quantity.