Suppose MPL = 0

question 78

Multiple Choice

Suppose MPL = 0.5 ∗ (q/L) and MPK = 0.5 ∗ (q/K) .In the long run,the firm will hire equal amounts of capital and labor

• A)all of the time.
• B)only when w = r.
• C)only when w = 0.5 ∗ r.
• D)at no point in time.

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Definitions:

Fed's Purchase

The buying of securities or assets by the Federal Reserve to inject money into the banking system and stimulate economic activity.

Political Pressure

The exertion of influence by individuals or groups to achieve certain actions or policies from government or other authority figures.

Board of Governors

The leading body of a central banking system, such as the Federal Reserve in the United States, responsible for overseeing the nation's monetary policy.

Appointed

Selected or designated for a position or duty, typically by an authority, rather than through election.