In the open-economy macroeconomic model, the market for loanable funds equates national saving with
a. domestic investment.
b. net capital outflow.
c. national consumption minus domestic investment.
d. None of the above is correct.
d
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The payoffs for financial derivatives are linked to
A) securities that will be issued in the future. B) the volatility of interest rates. C) previously issued securities. D) government regulations specifying allowable rates of return.
Refer to the above table. If the marginal revenue product is $21, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?
A) 1; $17 B) 2; $19 C) 2; $21 D) 3; $21
The law of demand (downward-sloping demand curve)is based on the idea of
a. maximum total utility b. minimum marginal utility c. total utility divided by quantity of the good consumed d. law of diminishing marginal utility e. consumers minimize total utility
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. She has an effort cost of C = e2 and a reservation wage of $1,500 so that her compensation package is W = 1,500 + 0.2 Q, where the CEO sets the incentive at 0.2 and Q = 200 e. Here effort is known only by the employee. There is a random shock to output each period whose mean is zero. (a) What is the optimal effort for Mary Sue Nelson? (b) On average, what total wage or salary will she earn each month? (c) On average, what is the output of sales contracts that she makes? (d) On average, what kind of profit will the CEO earn off of Nelson's work?
What will be an ideal response?