Suppose the Japanese yen increases in its value relative to the U.S. dollar. In the U.S. economy,
A) the price level will increase and real GDP will fall if the increase in aggregate demand is less than the decrease in aggregate supply.
B) the price level will increase and real GDP will fall if the decrease in aggregate demand is more than the increase in aggregate supply.
C) the price level will fall and real GDP will increase if the increase in aggregate supply is greater than the decrease in aggregate demand.
D) the price level will fall and real GDP will decrease if the decrease in aggregate demand is less than the increase in aggregate supply.
A
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Suppose you cannot buy information that completely removes the uncertainty from a business decision that you face, but you could buy information that reduces the degree of uncertainty
Based on the discussion in this chapter, the value of this partial information could be determined as the: A) expected outcome under complete certainty minus the expected outcome under the partial information case. B) expected outcome under the partially uncertain case minus the expected outcome under the completely uncertain case. C) utility of the partially certain case minus the utility of the completely certain case. D) We cannot determine the value of information under partial certainty.
If a union sets the wage rate to maximize the total wage receipts of its members, the price elasticity of demand for labor would be
A) zero. B) numerically equal to 1. C) finite, but greater than -1. D) positive, but less than 1.