For a monopsonist, the marginal factor cost is always:
a. equal to the wage rate.
b. less than the wage rate.
c. greater than the wage rate
d. the same as the labor supply.
e. the same as the labor demand.
QUESTION 2In order to convert nominal gross domestic product (GDP) to real gross domestic product (GDP), we must divide:
a. real GDP by the price index.
b. nominal GDP by the price index.
c. the price index by nominal GDP.
d. the price index by real GDP.
e. nominal GDP by 100.
QUESTION 3Supply-side economics emphasized government policies to:
a. restrict aggregate spending and boost aggregate supply.
b. increase minimum wage to improve labor productivity.
c. stimulate real GDP by improving incentives to work.
d. lower interest rates to boost saving.
e. increase government tax revenues in order to increase government purchases.
QUESTION 4If the consumer price index (CPI) this year is 162 and last year it was 170, the inflation rate
a. is positive.
b. is negative.
c. has decreased since last year.
d. has increased since last year.
e. is the same as last year.
QUESTION 5The monopsonist's labor supply curve is the same as the:
a. wage rate.
b. marginal revenue product curve.
c. marginal product curve.
d. market labor demand curve.
e. market labor supply curve.
QUESTION 6Fiscal policy under the Reagan administration was intended to:
a. stimulate the economy by decreasing taxes in order to increase consumption.
b. increase tax revenues by increasing the tax rate.
c. balance the budget by increasing defense spending and increasing taxes.
d. stimulate the economy by decreasing taxes in order to increase aggregate supply.
e. stimulate the economy by increasing government spending in order to increase aggregate supply.
QUESTION 7If the consumer price index (CPI) is 200 one year and 206 the next year, the annual rate of inflation as measured by the CPI is approximately _____.
a. 103 percent
b. 1 percent
c. 6 percent
d. 3 percent
e. 206 percent
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