In terms of aggregate supply, the difference between the long run and the short run is that in the long run:
A. the price level is variable.
B. employment is variable.
C. real output is variable.
D. nominal wages and other input prices are fully responsive to price-level changes.
D. nominal wages and other input prices are fully responsive to price-level changes.
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The ratio that relates the change in the money supply to a given change in the monetary base is called the
A) money multiplier. B) required reserve ratio. C) deposit ratio. D) discount rate.
A firm is making a long-run planning decision. It wants to decide on the optimal size of plant and labor force. It is considering building a medium-sized plant and hiring 100 workers
Engineering estimates suggest that at those levels, the marginal product of capital will be 100 and the marginal product of labor will be 75. If the wage rate is $5 and the rental rate on capital is $10, is the firm making the right decision? Support your answer.