Which of the following is most likely to close a recessionary gap in the economy?
a. A decrease in the expenditure on infrastructure
b. An increase in the income tax rate
c. An increase in the rate of foreign exchange
d. A decrease in money supply
e. An increase in the compensation for government employees
e
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The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity
A) greater than B) less than C) equal to D) not comparable to E) unrelated to
Why might firms pay an efficiency wage rather than a market-clearing wage?
What will be an ideal response?
If real GDP exceeds potential GDP, this means that
a. output is below the level produced at the benchmark rate for high employment and high rate of resource utilization. b. this cannot occur; the economy can never be at a point where real GDP exceeds potential GDP. c. cyclical output is above what the economy can sustain in the long-run. d. the economy is expanding.
If the utility function (U) between bananas (B) and jam (J) can be represented as U(B,J) = 3ln(B)+4ln(J), what is the marginal rate of substitution (MRS) between bananas and jam?
A) 4B. B) -3J/(4B). C) 4/(3J). D) 3B/J.