In the neoclassical growth model, n increase in the saving rate results in
a. faster permanent growth without a resultant effect on the equilibrium growth rate.
b. faster temporary growth without an effect on the long-run equilibrium growth rate.
c. faster temporary growth with a resultant effect on the equilibrium growth rate.
d. None of the above
B
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Differentiate between the following
a) Normal goods and inferior goods b) Substitutes and complements
Let MC be the marginal private cost per megawatt hour (Mwh) of producing electricity using coal. Let MSC be the marginal social cost per Mwh and T be the tax per Mwh. To achieve efficiency, the tax should be set so that
A) MC = MSC + T. B) MSC = MC + T. C) MC + MSC = T D) MC = T.
If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is
A) [(0.9 $/euro) (40 euro per a European basket)]/[(50 $/U.S. basket)]. B) [(0.9 $/euro) (50 $/U.S. basket)]/[(40 euro per a European basket)]. C) [(40 euro per a European basket)]/[(50 $/U.S. basket) (0.9 $/euro)]. D) [(50 $/U.S. basket)]. E) [(0.9 $/euro) (40 euro per a European basket) (50 $ U.S. basket)].
Suppose that oil prices increase sharply while the rate of growth in labor productivity declines. The combination of these two factors should ________.
A. shift the short-run aggregate supply curve to the right B. shift the short-run aggregate supply curve to the left C. shift the aggregate demand curve to the left D. shift the aggregate demand curve to the right