In the long run, an increase in FDI in the manufacturing sector will __________ the return to capital in the ____________ sector(s).
a. decrease; agriculture
b. increase; manufacturing
c. decrease; manufacturing
d. not change; manufacturing or agriculture
Ans: d. not change; manufacturing or agriculture
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
The above figure illustrates Mary's production possibilities frontier. If Mary wants to move from point d to point c, she must
A) improve technology. B) increase her accumulation of capital. C) give up some of good X in order to obtain more of good Y. D) give up some of good Y in order to obtain more of good X.
A decrease in long-run average costs resulting from increases in output is
A. attributed to the law of diminishing marginal product. B. attributed to constant returns to scale. C. attributed to economies of scale. D. attributed to diseconomies to scale.
Cost-of-living adjustment clauses (COLAs):
A. invalidate the "rule of 70." B. apply only to demand-pull inflation. C. increase the gap between nominal and real income. D. tie wage increases to changes in the price level.