An effort by the Fed to reduce aggregate demand may be thwarted because
A) investment could remain the same or increase because of optimistic expectations by businesses about the future of the economy.
B) investment and interest rates are positively related.
C) investment could fall because of pessimistic expectations.
D) taxes may have been increased.
Ans: A) investment could remain the same or increase because of optimistic expectations by businesses about the future of the economy.
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The marginal product of labor (measured in units of output) for Relient Corp is given by MPN = A(200 - N)
where A measures productivity and N is the number of labor hours used in production. Suppose the price of output is $3 per unit and A = 2.0. What will be the demand for labor if the nominal wage is $30? A) 170 B) 185 C) 190 D) 195
Suppose the U.S. government banned the sale and production of cigarettes. Which of the following would be most likely to occur?
a. No one would smoke anymore. b. The amount of violence involved in the buying and selling of cigarettes would increase. c. The price of cigarettes would decrease. d. The supply for cigarettes would become elastic.