The Classical macroeconomic model proposes that
A) real GDP equals potential GDP as long as inflation equals zero.
B) government intervention is required to help the economy reach its potential.
C) changes in the quantity of money are critical in driving economic growth.
D) socialism produces the most efficient economic outcomes for a society.
E) markets work efficiently to produce the best macroeconomic outcomes.
E
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When per capita real GDP is increasing, real output is growing
What will be an ideal response?
A firm’s net investment will be negative if
a) the actual capital stock is less than the optimal capital stock b) the rate of return on capital exceeds the market interest rate c) the depreciation rate is less than the gross investment rate d) gross investment is zero e) its workforce is growing faster than its capital stock
An increase in the price of one good can cause the demand for another good to increase if the goods are complements.
Answer the following statement true (T) or false (F)
If there are external benefits associated with the consumption of a good or service:
A. The private demand curve will overestimate the true demand curve B. The private demand curve will underestimate the true demand curve C. Consumers will be willing to pay for all these benefits in private markets D. The market demand curve will be the vertical summation of the individual demand costs