The Solow Growth Model is a tool that is used for studying:
A) how aggregate demand is determined. B) how net exports are determined.
C) how aggregate supply is determined. D) how aggregate income is determined.
D
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Suppose Jon Stewart of the "Daily Show" makes an annual income of $1,000,000. If he quit his television job and went into producing he could make $400,000 per year. Jon Stewart's annual economic rent to labor is
A) $1,400,000. B) 1,000,000. C) $400,000. D) $600,000.
If the Fed wanted to increase the money supply, they could:
A. increase the reserve requirement, reducing the reserve ratio. B. decrease the reserve requirement, reducing the reserve ratio. C. increase the reserve requirement, increasing the reserve ratio. D. decrease the reserve requirement, increasing the reserve ratio.
Given the slope of the aggregate demand curve, real GDP demanded will decrease when
a. real income rises. b. real income falls. c. the price level falls. d. the price level rises.
Refer to the diagram for a natural monopolist. If a regulatory commission set a maximum price of P 2 , the monopolist would:
A. produce output Q 1 and realize an economic profit.
B. produce output Q 3 and realize an economic profit.
C. close down in the short run.
D. produce output Q 3 and realize a normal profit.