If labor and capital are substitutes in production, then an increase in the amount of capital will
a. reduce the total product associated with each quantity of labor.
b. decrease the marginal product of labor.
c. increase the marginal product of labor.
d. have no effect on labor productivity.
b. decrease the marginal product of labor.
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The combination of inflation and real growth shown by the AD curve give:
A. the same level of inflation. B. the same level of money supply growth. C. the same level of real GDP growth. D. the same level of nominal GDP growth.
Refer to Scenario 5.7. As a risk-neutral executive, Natasha
A) is indifferent between projects D and E. B) prefers project E to project D, but do not necessarily consider E the best. C) prefers project E to all other projects. D) seeks the highest "profit if successful" of all the projects. E) seeks the project with the most even odds.