The division of labor and specialization explain
A) why the average product of labor falls when firms use more capital or change the layout of their businesses.
B) why, when the marginal product of labor increases, so does the average product of labor.
C) why the marginal product of labor rises as a firm hires its first units of labor.
D) why firms may find it profitable to use more workers when the marginal product of labor is negative.
C
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In Figure 17-3 above, suppose we are working under the assumption of the Lucas model. The Fed has been following an announced policy of "zero money growth for an indefinite period
" Suddenly and without warning it produces positive money growth and a "money surprise." This would result in a movement between points A) A and C. B) A and B. C) D and B. D) D and A. E) A and D.
Which of the following is NOT a form of a short-term loan in the shadow banking system?
A) repurchase agreements B) commercial paper C) money market mutual fund shares D) bank deposits