Marginal physical product diminishes as additional workers are hired because
A. Later hires do not work as hard as earlier hires.
B. Later hires are not as skilled as earlier hires.
C. Each worker has an increasingly larger amount of other factors with which to work.
D. Each worker has an increasingly smaller amount of other factors with which to work.
Answer: D
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The argument advanced by Milton Friedman for adopting a monetary growth rule is that
A) active monetary policy potentially destabilizes the economy. B) a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle. C) the growth rate of M1 has been unstable. D) the Fed can control the money supply, but not the level of interest rates.
The saving and investment equation holds only when the federal budget is balanced
Indicate whether the statement is true or false
The federal budget process begins when federal agencies submit their budget requests to the:
a. Treasury Department. b. Council of Economic Advisors (CEA). c. Office of Management and Budget (OMB). d. Congressional Budget Office (CBO).
The discount rate is the interest rate that
a) Banks charge one another for loans. b) Banks charge the Fed for loans. c) The Fed charges banks for loans. d) The fed charges congress for loans.