Among countries with similar Solow steady states, poorer countries tend to grow ______ rich countries:
A) more slowly than
B) at the same rate as
C) faster than
D) sometimes faster and sometimes more slowly than
Ans: C) faster than
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During the 2007-2009 financial crisis, many households found themselves with negative wealth (debts to repay) and a binding borrowing constraint. Describe the income and substitution effects of a decrease in the real interest rate
What will be an ideal response?
The aggregate output demanded for a given price level occurs at the point where: a. an economy reaches the full employment of labor. b. aggregate expenditure equals real GDP
c. actual aggregate expenditures exceeds real GDP. d. inventories of goods and services are increasing. e. inventories of goods and services are decreasing.
Shortages are associated with price _______; surpluses are associated with price _______.
A. floors; ceilings B. ceilings; floors C. equilibrium; equilibrium D. None of these choices are correct.
Suppose the economy was in equilibrium, and the national government increased spending by $200 billion. Monetarist theory would predict that the nation's:
a. Real risk-free interest rate will remain unchanged, but the money multiplier will rise. b. Real risk-free interest rate will fall causing real GDP to rise. c. Real risk-free interest rate will fall causing the money multiplier to rise. d. Real risk-free interest rate will rise but real GDP will remain the same. e. Real risk-free interest rate will rise causing real GDP to fall.