An increase in capital formation that expands long-run aggregate supply will
a. increase output and decrease prices.
b. increase both output and prices.
c. decrease both output and prices.
d. decrease output and increase prices.
A
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Why is the following statement incorrect: "A tax on all consumption goods is efficient because it equally taxes all goods and therefore does not distort their prices."
What will be an ideal response?
Consider the following data for men and women: Men Women Average Hourly Wage:$12.40 $9.90 Average Years of Work Experience: 14.3 9.5 If a regression estimates the return to experience for men, ?M, to be 0.25, how much of the average difference in wages can be attributed to differences in work experience and how much can be attributed to discrimination and/or unobservable characteristics?
A. $1.20 to differences in work experience; $1.30 to discrimination/unobservable characteristics B. $1.30 to differences in work experience; $1.20 to discrimination/unobservable characteristics C. $0.00 to differences in work experience; $2.50 to discrimination/unobservable characteristics D. $1.50 to differences in work experience; $1.00 to discrimination/unobservable characteristics E. $2.50 to differences in work experience; $0.00 to discrimination/unobservable characteristics
The opportunity cost of going to a particular college is not the same for everyone.
Answer the following statement true (T) or false (F)
The rational expectations perspective suggests that:
A. fiscal policy is more powerful than monetary policy. B. monetary policy is more powerful than fiscal policy. C. fiscal and monetary policy are not likely to achieve their stated aims. D. fiscal policy works only to the extent that it is accompanied by fully anticipated changes in the money supply.