How do we measure economic growth?
A. increases in the price level, as indicated by the GDP chain price index
B. increases in nominal GDP
C. increases in real GDP
D. increases in the labor force
Answer: C
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The labor demand curve slopes downward because
A) the firm maximizes profits by hiring more labor when the real wage rate rises. B) workers supply more hours of work when the real wage rate rises. C) the firm maximizes profits by hiring more labor when the real wage rate falls. D) workers supply fewer hours of work when the real wage rate rises.
Mary and Martha both can make cookies and cakes of the same quality, though Mary can make more of both cookies and cakes per hour than Martha. With the bake-sale quickly approaching, they want to make as many cookies and cakes as possible. In which of the following situations will the most cookies and cakes be made? a. Mary makes as many cookies and cakes as she can, while Martha does
nothing. b. Martha makes as many cookies and cakes as she can, while Mary does nothing. c. Mary and Martha both specialize in what they are better at making. d. There is not enough information.