An increase in the rate of depreciation will cause the discounted present value of expected profits to
A) decrease.
B) increase.
C) remain unchanged if the real interest rate increases by the same amount.
D) none of the above
A
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Neoclassical growth theory
A) predicts that growth rates and incomes per person throughout the world will converge. B) predicts that the faster growing underdeveloped nations will overtake and then surpass the industrial nations. C) predicts that nations that enjoy a technological advantage will maintain that advantage. D) makes no predictions about the relative growth or incomes among countries.
D. All of these statements are true.
A. an output gap. B. a recession. C. a boom. D. an inflationary gap. AACSB: Reflective Thinking
In the long run, the economy is better off if policymakers exploit the short-run trad-eoff between inflation and the unemployment rate
a. True b. False Indicate whether the statement is true or false
In William Safire's 1983 essay, "Smoot-Hawley Lives," he argues that the United States should
a. threaten retaliation if trading partners practice protectionism. b. pursue a unilateral free trade policy regardless of what others do. c. limit government's role in the economy.