The value of marginal product (VMP) of an input such as labor is the
A) additional output produced by the last unit of an input.
B) total revenue divided by the units of the input employed.
C) extra revenue gained by selling one more unit of output.
D) extra revenue gained by employing one more unit of the input.
D
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In the classical model, fiscal policy has no demand-side effects on output or employment
a. True b. False
Suppose U.S. consumers start buying more English shoes and fewer U.S. shoes. What impact will this trend have on the foreign exchange market?
a. The U.S. overall demand for foreign exchange, and British pounds, in particular, will increase. b. The U.S. overall demand for foreign exchange, and British pounds, in particular, will decrease. c. The U.S. demand for British pounds will increase, but the overall demand for foreign exchange will probably decrease. d. The U.S. demand for British pounds will decrease, but the overall demand for foreign exchange will probably increase.