The law of diminishing returns applies to
A) the short run only.
B) the long run only.
C) both the short and the long run.
D) neither the short nor the long run.
E) all inputs, with no reference to the time period.
A
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Refer to the scenario above. Suppose the economy is currently operating on the production function F2 and E2 is the level of employment in the country. If the demand curve for labor shifts to the left, ________
A) employment will remain unchanged at E1 B) output will increase from Y2 to Y3 C) employment will decrease from E2 to E1 D) employment will increase from E2 to E3
With the invention of ATM machines, the public now holds less currency. As a result, we would expect to have seen
a. both the M1 and the M2 multipliers to increase over time. b. the M1 multiplier to increase while the M2 multiplier to decrease over time. c. the M1 multiplier to decrease while the M2 multiplier to increase over time. d. None of the above