According to the principle of diminishing returns, if the number of workers is increased beyond the point of diminishing returns, then the additional worker:
A. increases total output by the same amount as previous workers.
B. increases total output by more than the amount of previous workers.
C. increases total output by less than the amount of previous workers.
D. decreases total output.
Answer: C
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If the price of rocket fuel imported from Russia and used by NASA suddenly increases, then the U.S. CPI will ________ and the U.S. GDP deflator will ________
A) increase; not change B) increase; increase by more than the CPI C) not change; increase D) increase; increase E) not change; not change
When the Federal Reserve sells a government bond to a primary dealer, reserves in the banking system ________ and the monetary base ________, everything else held constant
A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases
During the Great Depression, unemployment peaked at
A) 10%. B) between 15 and 20%. C) over 20%. D) 81%.
Entry into a competitive market will continue until
A) economic profits are zero. B) normal profits are zero. C) when accounting losses are zero. D) a. and b. are true