The open economy effect and interest rate effect are two of the reasons why
A) higher price levels increase long-run aggregate supply.
B) growth of the labor force does not contribute to economic growth in wealthy countries.
C) capital formation does not contribute to economic growth in poor countries.
D) the aggregate demand curve slopes downward.
D
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If the price of a barrel of oil is $100 this year and the interest rate is 10 percent, then according to the Hotelling Principle the price next year is expected to be ________ per barrel
A) $90 B) $110 C) $100 D) None of the above is correct.
For a household in a (c,c') graph, the optimal consumption bundle is
A) to the left of the endowment point. B) to the right of the endowment point. C) on the endowment point. D) dependent on other factors.
The long-run aggregate supply (LRAS) curve is
A) horizontal. B) vertical. C) positively sloped. D) negatively sloped.
When people play the "ultimatum game," in which one person gets to decide how to split a sum of money by offering a share to another person and neither gets anything if the second person rejects the offer, the result is often that the first person offers:
A. the full amount, and the second person accepts this offer. B. something close to 50-50, but the second person rejects this offer. C. something close to 50-50, and the second person accepts this offer. D. one cent, and the second person accepts this offer.