As a result of a fire, a small business owner loses some of her computers and other equipment. If the property of diminishing returns applies to all factors of production, she should expect to see
a. an increase in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
b. an increase in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor.
c. a decrease in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
d. a decrease in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor.
b
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Which of the following will NOT shift the Keynesian short-run aggregate supply curve?
A) a change in input prices B) a change in technology C) a change in the price level D) a change in profit expectations
Suppose that the economy is producing below potential GDP and the Fed implements the correct change in monetary policy, but not until after the economy has passed the trough of the recession. Then
A) the Fed's contractionary policy will result in too large of a decrease in GDP. B) the Fed's expansionary policy will result in too large of an increase in GDP. C) the Fed's expansionary policy will result in too small of a decrease in GDP. D) the Fed's contractionary policy will result in too small of a decrease in GDP.