Looking at the globalized AS/AD model, the economy can exceed potential output, without generating accelerating goods inflation, because:
A. the domestic price level always exceeds the world price level.
B. the world price level always exceeds the domestic price level.
C. the world price level puts a cap on the domestic price level.
D. the LRAS curve is no longer vertical.
Answer: C
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A local restaurant offers an "all you can eat" ribs special. You pay $11.95, and then you can eat as many servings as you desire at no additional cost. It would follow that you will stop eating when:
a. your marginal utility (or value) derived from eating another serving is zero. b. your total utility (or value) derived from all of the servings consumed just equals $11.95. c. your marginal utility (or value) derived from another serving equals $11.95. d. it is physically impossible for you to eat any more.
When an employer pays the cost of educating a worker, it is likely that the employer
a. is demonstrating altruistic motives. b. is pursuing some objective other than profit-maximization. c. hopes to recapture its investment in the form of increased labor productivity. d. receives reimbursement from the government for the cost of the education.