An Article in the Wall Street Journal observes: "For 2008, productivity grew and astounding 2.8% from 2007 even as the economy suffered through its worst recession in decades." How is it possible for labor productivity - output per hour worked-to increase if output-real GDP-is falling?
A. The "new economy" is based on information technology
B. Faster and less expensive computers have made communication and data processing faster and easier
C. Laptop computers and wireless Internet allow people to work while they are away from their jobs
D. Business record-keeping is now faster and more accurate due to computer technology.
E. All of the above
Answer: E. All of the above
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People expect that the exchange rate for the dollar will rise from 90 yen per dollar to 111 yen per dollar in a month. As a result
A) the supply curve of dollars shifts leftward. B) the supply curve of dollars shifts rightward. C) the demand curve for dollars shifts leftward. D) there is a downward movement along the supply curve of dollars.
Suppose the Fed buys government securities from a commercial bank. Why is there a multiplier effect on the quantity of money?
What will be an ideal response?