In Econland population and average labor productivity are constant. If a larger proportion of the population enters retirement, then total output will ________ and output per person will ________.
A. decrease; remain constant
B. decrease; decrease
C. remain constant; remain constant
D. increase; increase
Answer: B
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An inferior good is a good whose quantity demanded
A. rises when its price falls. B. falls when the price of a related good falls. C. falls when the consumer’s total utility rises. D. rises when the consumer’s real income falls.
In real business cycle theory, the persistence of shocks to total factor productivity is justified by
A) the fact that some capital depreciates every period. B) the behavior of Solow residuals. C) the fact that Taylor rules have been used in post-war United States. D) the fact that capital takes some time to build.
Drawing on her account at Regional Bank, Samantha writes a check to Isabella, who deposits the check in her account at Local Bank. Once the check has cleared, which of the following will occur to the reserves of the banking system and the M1 money supply?
a. Bank reserves will increase; M1 will increase. b. Bank reserves will increase; there will be no change in M1. c. There will be no change in bank reserves; M1 will increase. d. There will be no changes in either bank reserves or M1.
Which of the following would be consistent with a decline in labor productivity?
a. Faster growth in capital formation b. Enhanced worker quality c. Decreased manufacturing production d. High federal government budget surpluses