In Figure 17-3 above, suppose we are working under the assumption of the Lucas model. It is the year of the presidential election, and fiscal policy becomes more expansionary
If every firm is convinced that its price increase is being duplicated across the economy, we would picture this as a movement between points A) A and C.
B) A and B.
C) D and B.
D) D and A.
E) A and D.
E
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Consumption per worker is 72, depreciation is 12.5%, and capital per worker is 64. Given the production function y = 20 , show that this economy is in a steady state
If the saving rate should double, what is the new steady-state level of consumption per worker?
Explain why there is a direct relationship between price and quantity supplied
What will be an ideal response?
A decrease in the rate of interest, other things being equal, will cause a:
a. rightward shift of the investment demand curve. b. movement upward along the investment demand curve. c. movement downward along the investment demand curve. d. leftward shift of the investment demand curve.
The more inelastic the demand for a product, the more likely that the actual benefit of a subsidy granted on the product will
a. go to sellers. b. go to buyers. c. go equally to both buyers and sellers. d. do none of the above.