All of the following are examples of spending on factors of production in the circular flow model except
A) Bima hires two students to work at his ice-cream store.
B) Iris buys a dozen roses for her mother's birthday.
C) "Get Fit Together" purchases 3 new treadmills for its gym.
D) The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.
B
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Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?
What will be an ideal response?
The aggregate supply schedule is steeper where the money wage is more variable than where the money wage is fixed because the rise in the money wage in the
a. fixed-wage case dampens the effect on employment and output from an increase in the price level. b. variable-wage case dampens the effect on employment and output from an increase in the price level. c. variable-wage case heightens the effect on employment and output from an increase in the price level. d. all of the above