Assume the economy has achieved the balanced growth steady state. Explain what factors determine the rates of growth of each of the following variables when balanced growth is achieved: output per effective worker, capital per effective worker, output per worker, output, and consumption per worker
What will be an ideal response?
When balanced growth is achieved, K/NA and Y/NA are constant so their rates of growth are 0. K and Y must, therefore, grow at the same rate as NA which equals the sum of population growth and rate of TP. The rate of growth of Y/N will equal the rate of growth of TP. C will grow at the same rate as Y.
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For firms that sell one product in a perfectly competitive market, average revenue is:
A. calculated by total output divided by total revenue. B. equal to marginal cost. C. equal to the market price. D. greater than market price.
When marginal product ________ average product, average product must be ________.
A. is less than; increasing B. is greater than; increasing C. is greater than; decreasing D. Any of these is possible.
If total expenditures fall at a given price level, then the
A) quantity demanded of Real GDP rises. B) quantity demanded of Real GDP falls. C) AD curves shifts to the right. D) AD curve shifts to the left. E) none of the above
In a certain economy, the components of planned spending are given by: C = 500 + 0.8(Y - T) - 300rI P = 200 - 400rG = 200NX = 10T = 150 Given the information about the economy above, which expression gives induced expenditures?
A. 0.8Y B. [910 ? 700r ] C. 0.2Y D. [790 ? 700r ]