Almost every time that there has been an inverted yield curve, what took place within one year?
A) recession
B) rising inflation
C) financial crisis
D) higher bond yields
A
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Suppose the price of a good rises. When will the resulting substitution effect reduce the quantity demanded of the good?
a. Always. b. Whenever the good is a non-Giffen good. c. Only when the good is normal. d. Only when the good is inferior.
If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75, and the price of the machinery per period is $25, in order to achieve optimal input proportions, the firm should use
A. more labor and less machinery. B. more machinery and less labor. C. more labor with the same amount of machinery. D. the current combination.
The following table depicts the production relationship between units of labor and output of pepper on Pietrov’s Pepper Farm. Labor Peppers Labor Peppers 1 10 6 75 2 25 7 77 3 45 8 78 4 60 9 77 5 70 10 75 Graphically show the three zones of production corresponding to increasing, decreasing, and negative marginal product, noting the point of diminishing returns.
What will be an ideal response?
According to the new Keynesian school of thought, fiscal policy is a completely ineffective tool in combating supply-side shocks
a. True b. False Indicate whether the statement is true or false