With an upward-sloping short-run aggregate supply curve, firms respond to a change in aggregate demand by adjusting:
A. prices but not quantities in the short run.
B. quantities but not prices in the short run.
C. neither prices nor quantities in the short run.
D. both prices and quantities in the short run.
Answer: D
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Suppose the growth in GDP per hour resulting from physical capital in an economy is 1% and the growth resulting from human capital is 2%. If the annual growth rate of GDP per hour is 5%, the growth resulting from technology equals:
A) 4%. B) 3%. C) 2%. D) 1%.
The research of Gavin Wright (1978) on the antebellum period suggests that
(a) there was no limit on the profitability of the plantation utilizing slave labor. (b) issues with management, communication and discipline limited the profitability of the slave plantation. (c) more than 75 percent of the Southern farms were plantations and utilized slave labor. (d) all of the above.
Increased government borrowing to cover a budget deficit results in:
a. a higher interest rate and the depreciation of the U.S. dollar. b. a higher interest rate and the appreciation of the U.S. dollar. c. a lower interest rate and the depreciation of the U.S. dollar. d. a lower interest rate and the appreciation of the U.S. dollar. e. increased purchases of foreign assets by U.S. residents.
In the Keynesian model, if planned saving is greater than planned investment,
a. the economy will expand. b. unemployment will rise. c. the marginal propensity to consume will decline. d. the rate of interest will rise.