Which of the following will be the most likely impact of an unanticipated increase in the money supply?
What will be an ideal response?
A decrease in the real interest rate, which in turn stimulates investment and GDP.
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If the initial distribution of labor and capital is Pareto optimal, which of the following statements is TRUE?
A) It is possible to reallocate labor and capital across industries so as to increase the production of one good without decreasing the production of another good. B) It is possible to reallocate labor and capital across industries so as to increase the production of one good, but only by reducing the production of another good. C) It is possible to reallocate labor and capital across industries so as to increase the production of every good. D) none of the above
A perfectly competitive firm spends a significant part of its revenue on advertisements, and tries to sell more by reducing its price below the market price
a. True b. False Indicate whether the statement is true or false