A low rate of expected inflation tends to lead to a ________ rate of actual inflation and a high rate of expected inflation tends to lead to a ________ rate of actual inflation.
A. low; low
B. high; low
C. low; high
D. high; high
Answer: C
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When did the United States suffer hyperinflation?
A) Revolutionary War B) War of 1812 C) World War II D) Korean War
Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the capital stock is $32,000 billion, and the current labor force is 120 million (or 0.120 billion) workers
All else equal, if the labor force increased by 20 million workers, the value of the marginal product of capital will be A) $0.0104. B) $0.0239. C) $0.0639. D) $0.0717.
Real GDP =________ where the price level is the ________
A) Nominal GDP × Price level; GDP deflator B) Nominal GDP ÷ Price level; GDP deflator C) Nominal GDP ÷ Price level; CPI D) Nominal GDP × Price level; CPI E) none of the above
A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85 . Later, a manager has an opportunity to outsource production to another company at a cost per unit of $1.75 . If you are the manager, you a. should consider the $400,000 as a sunk cost, not relevant to the decision
b. should reduce his effort by ignoring any new developments and letting the production run as it is. c. should ignore the $400,000 fixed cost. d. Both A & C