What happens to the marginal product of labor when the market price of the good produced increases?
A. Increases proportional to price.
B. Decreases proportional to price.
C. Stays the same.
D. Falls because quantity demanded falls.
Answer: C
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In the Solow model, if f(k) = 2k0.5, s = 0.1, n = 0.1, and d = 0.05, what is the value of f(k) at equilibrium?
A) 2/3 B) 4/3 C) 2 D) 8/3
Based on the Taylor rule, from 1965 to 1979, monetary policy was
A) too tight. B) too easy. C) just about right. D) too tight from 1965 to about 1970 and too easy from about 1970 to 1979.
An inflation-induced increase in the effective tax rate on interest income and capital gains results in
a. a leftward shift of the saving schedule. b. a rightward shift of the saving schedule. c. no shift of the saving schedule. d. a rightward shift of the investment schedule.
When there is excess supply of a product in a market,
a. price will tend to rise. b. price must be above the equilibrium price. c. producers will expand output and sales will rise. d. price must be below the equilibrium price.