When an input represents a larger proportion of a firm's total costs, then
A) demand for the input will tends to be less elastic.
B) the input demand will not vary significantly with a change in input price.
C) the usage of the input cannot be varied in the production function.
D) demand for the input will tends to be more elastic.
Answer: D
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When the dollar depreciates, the prices of imported inputs
a. fall and aggregate supply shifts outward. b. fall and aggregate supply shifts inward. c. rise and aggregate supply shifts outward. d. rise and aggregate supply shifts inward.
Which of the following would be most appropriate if the Federal Reserve wanted to increase the money supply in order to stimulate the economy?
a. buy U.S. securities b. force the Treasury to reduce the national debt c. raise the discount rate d. increase the reserve requirements