Your boss wants to know if you should lay off any workers. You answer that you should lay off workers if the
A. marginal revenue product of labor is equal to the nominal wage rate.
B. marginal revenue product of labor is greater than the nominal wage rate.
C. marginal product of labor is greater than or equal to the real wage rate.
D. marginal product of labor is less than the real wage rate.
Answer: D
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Open market operations refers to the Fed's
A) manipulation of the required reserve ratio. B) purchase and sale of government bonds. C) manipulation of the discount rate. D) use of all of the above techniques.
In a two-nation, two-good world, which of the following statements is true?
A. One nation cannot possibly have an absolute advantage over the other nation in both products B. If one nation as the comparative advantage in one product, then the other nation would have the comparative advantage in the other product C. One nation will always have the comparative advantage over the other nation in one of the products D. If one nation has the absolute advantage in one product, then the other nation would have the absolute advantage in the other product