If an economy invests more than it loses through depreciation ________
A) the saving rate will fall
B) the saving rate will rise
C) the quantity of labor will fall
D) the capital stock will expand
D
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As hourly wages have risen in the United States in the twentieth century, the number of hours of labor supplied by most wage workers has
a. fallen. b. stayed roughly constant. c. risen. d. generally risen, but has fallen during periods of recession.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and current international transactions become more negative (or less positive). b. Real GDP rises, and current international transactions become more negative (or less positive). c. Real GDP and current international transactions remain the same. d. Real GDP rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education.
Savings = ?0 + 
0 Edu + ?1Inc + u
The variable ‘Edu' takes a value of 1 if the person is educated and the variable ‘Inc' measures the income of the individual.
?
Refer to the model above. The benchmark group in this model is _____.
A. the group of educated people B. the group of uneducated people C. the group of individuals with a high income D. the group of individuals with a low income
Refer to the graph shown. If this monopolist were forced to set price equal to average cost, it would charge a price of:
A. $8. B. $3. C. $12. D. $2.