Suppose there is an increase in the saving rate. Explain what effect this increase in the saving rate will have on the rate of growth of output per worker
What will be an ideal response?
As described in answers for the previous chapter, an increase in the saving rate will only temporarily affect the growth rates of Y and Y/N. Once the new balanced growth equilibrium is achieved, the growth rates of Y and Y/N will return to their original levels.
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The tables above show the marginal costs and benefits from production of paper. The efficient level of output is ________ of paper
A) 1,600 tons B) 2,400 tons C) 3,200 tons D) 4,000 tons
Natural resources:
A. are physical structures that sit on the earth, improving it and making it more productive. B. are production inputs that come from the earth. C. are natural talents people are born with that make them productive. D. None of these is true.
What can account for the negative slope of the marginal revenue product curve?
A) Diminishing marginal utility B) Diminishing marginal returns C) Monopsony power D) All workers eventually begin slacking. E) none of the above
When the Barro model assumes lump-sum taxes, this means
a. real taxes are independent of a household's income. b. nominal taxes depend negatively on a household's consumption. c. nominal taxes depend positively on a household's income. d. there is no tax on inheritances.