Suppose the pure rate of time preference is 1%, the growth rate of consumption per capita is 3%, and the elasticity of the marginal utility of consumption is 2. This suggests a value for the social rate of time preference of ...
a. 2%
b. 4%
c. 5%
d. 7%
e. 9%
Answer: d. 7%
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The principal buyers in financial markets are ________
A) financial intermediaries B) nonfinancial businesses C) commercial banks D) individual savers
Refer to Figure 6.1. Which of the following statements is false?
A) At point E the marginal product of labor is decreasing. B) At point E the marginal product of labor is negative. C) At point E the average product of labor is decreasing. D) At point E the average product of labor is negative. E) At point E the marginal product of labor is less than the average product of labor.
If you deposit $8,000 in a bank, calculate how much the bank must keep as required reserves and how much it can loan out if the required reserve ratio was 5 percent. If it was 8 percent? 13 percent? 26 percent?