The Solow model demonstrates that
A) in the absence of productivity growth, economic growth will turn negative in the long run.
B) in the absence of productivity growth, economic growth will reach a steady state of zero per-capita growth in the long run.
C) productivity growth must exceed the rate of growth in the population to avoid a steady state in the long run.
D) productivity growth will inevitably decline due to diminishing marginal productivity.
B
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Stock prices in Richland declined suddenly after one of the largest banks in Richland faced bankruptcy. If animal spirits play an important role in shaping Richland's economy, which of the following is likely to happen assuming all else equal?
A) Equilibrium unemployment in Richland will fall. B) Equilibrium wage levels in Richland will fall. C) Investment by firms in Richland will increase. D) Richland's consumption expenditure will increase.
With regard to the Navigation Acts (1651 and later amendments), all of the following answers are true except
(a) No commodities originating from the Empire were to be shipped in any but British (including colonial) ships. (b) No commodities imported into the Empire were to be carried in any but British ships. (c) Only British subjects were allowed to be merchants in the colonies, and only British ships were to carry commodities from one English port to another. (d) There is no "except"; all of the above answers are true.
Refer to the above figures. A unit tax of $2 has been levied on a good. Which of the panels depict the effect of the taxes?
A) Panel 1 B) Panel 2 C) Panel 3 D) None of the diagrams reflect the effect of the tax.
If the real interest rate in the domestic loanable funds market increases,
What will be an ideal response?