To eliminate an AD shortfall of $120 billion when the economy has an MPC of 0.75, the government should decrease taxes by
A. $400 billion.
B. $40 billion.
C. $120 billion.
D. $30 billion.
Answer: B
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A decrease in the price of a firm's output
A) raises the value of marginal product of each unit of labor. B) shifts the firm's demand for labor curve rightward. C) results in the firm increasing the amount of output it produces. D) None of the above is correct.
An increase in the availability of health insurance could be expected to cause the average price of health care to increase
Indicate whether the statement is true or false
In the neoclassical growth model, if two countries are exactly the same but one has a lower depreciation rate, we would expect that country to have
a. higher output, a higher capital-to-labor ratio, and the same per capita output growth in the steady state. b. higher output, a higher capital-to-labor ratio, and higher per capita output growth in the steady state. c. the same output and capital-to-labor ratio, but higher per capita output growth in the steady state. d. higher output, the same capital-to-labor ratio, and the same per capita output growth in the steady state.
Which of the following is not an accurate description of the point at which the labor supply and labor demand curves meet?
a. The point at which the market for labor has cleared b. The real wage at which the quantity of labor demanded is equal to the quantity of labor supplied c. The point at which there is no frictional unemployment d. The point at which there is no unemployment e. The wage at which the number of workers firms want to hire is equal to the number of people who want jobs