Which of the following conclusions is not supported by the Three-Sector-Model?
a. A decrease in borrowing causes the real risk-free interest rate and equilibrium quantity of real loanable funds to fall.
b. An increase in the supply of a nation's real loanable funds reduces the real risk-free interest rate and decreases the equilibrium quantity of real loanable funds.
c. An increase in a nation's demand for goods and services within the intermediate range results in an increase in the real GDP and a higher GDP Price Index.
d. An increase in the value of a nation's currency encourages domestic imports and discourages exports.
e. All of the above are supported by the Three-Sector Model.
.B
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In a Malthusian world, why is misery recurrent?
A) The marginal returns of capital are decreasing. B) Fertility is endogenous. C) Output is increasing in labor. D) Mortality depends on the standard of living.
Rexar, Inc is generating total economic profits. Considering this, which of the following statements is accurate?
a. Total revenue is equal to total costs at 0. b. Total revenue is less than total costs at 0 c. Total revenue is greater than total costs at q*. d. Total revenue is equal to total costs at q*
Education in the United States is heavily subsidized by the government. This fact suggest that
I. less than the efficient amount of education would be provided by an unregulated market. II. the marginal social benefit of education is greater than marginal social cost of education. A) I only B) II only C) both I and II D) neither I nor II
Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year. If the inflation rate was 3 percent, which of the following is the real rate of interest Marta received?
a. 10 percent b. 5 percent c. 3 percent d. 2 percent e. ?2 percent