According to real business cycle theorists, the tendency of money to lead output may be due to
A) government spending shocks, which lead to later changes in economic activity, and the tendency for bank loans to expand in advance of real activity that will occur at a later date.
B) the tendency for bank loans to expand in advance of real activity that will occur at a later date and the Federal Reserve's use of all available information in trying to stabilize the price level.
C) the Federal Reserve's use of all available information in trying to stabilize the price level and the Federal Reserve's use of all available information in trying to stabilize the level of economic activity.
D) the Federal Reserve's use of all available information in trying to stabilize the level of economic activity and government spending shocks, which lead to later changes in economic activity.
B
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Arbitrage occurs when an entity purchases a good in the lower priced market and sells it at the same time in the highed priced market. The existance of trade costs would ___ opportunites of abitrage
a) lower b) not affect c) increase d) completly eliminate
The marginal product of labor is equal to the
A) total product divided by the total number of workers hired. B) increase in the total product that results from hiring one more worker with all other inputs remaining the same. C) slope of the marginal product of labor curve. D) None of the above answers are correct.