If the last dollar spent on capital generated $1.05 in return while the last dollar spent on labor generated $0.99 in return, then in the long-run the firm should

A. reduce its spending on labor and increase its spending on capital

B. reduce its spending on capital and increase its spending on labor

C. continue to use the current combination of labor and capital

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Trinidad TremblayLv2

27 Jun 2019

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Since the United States has negative net foreignâ investment, its

A. net capital flow must be negative.

B. domestic saving must be less than its domestic investment.

C. exports must be greater than its imports.

D. domestic investment must be less than its domestic saving.

Expansionary fiscal policy is less effective in an open economy because

A. increases in the money supply will reduce interest rates and lower the value of theâ dollar, reducing aggregate demand.

B. increases in government spending can increase interestâ rates, which increases the value of the dollar and crowds out net exports.

C. increases in government spending will be partly spent on importedâ goods, which do not benefit the domestic economy.

D. increases in taxes reduceâ consumption, which in turn reduces consumption of imports and increases net exports.

When the Federal reserve uses contractionary monetary policy to reduceâ inflation, it

A. sells treasury securities increasing interestâ rates, leading to a stronger dollar that lowers net exports in an open economy.

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C. sells treasury securities decreasing interestâ rates, leading to a stronger dollar that lowers domestic investment in a closed economy.

D. buys treasury securities increasing interestâ rates, leading to a weaker dollar that increases net exports in an open economy.

If a country saves more than it investsâ domestically, then its net foreign investment must be (positive, negative, or zero)?

Which of the following correctly describes the ceteris paribus assumption?

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b) If the federal government increases government spending, and the Federal Reserve Bank lowers interest rates, we know that the increase in government spending caused unemployment to fall.

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coffeereindeer94

Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firms capacity. If he adds one more worker, the firms total monthly revenue will increase from $54,000 to $66,000. If he adds one more tractor, monthly revenue will increase from $54,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. Instructions: Enter your answers as whole numbers.

a. What is the marginal revenue product of labor? $ . The marginal revenue product of capital? $ .

b. What is the ratio of the marginal revenue product of labor to the price of labor (MRPL/PL)? . What is the ratio of the marginal product of capital to the price of capital (MRPK/PK)? .

c. Is the firm using the least-costly combination of inputs? .

d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent? .