In the Solow model, the faster growth of output that results from an increase in the saving rate is temporary, because ________
A) of diminishing marginal product of capital
B) with a larger stock of capital, consumption is encouraged more than investment
C) the rising capital stock depreciates at a faster rate
D) the economy settles into a steady state in which saving no longer rises
A
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Economic cost can best be defined as:
A. all costs exclusive of payments to fixed factors of production. B. any contractual obligation that results in a flow of money expenditures from an enterprise to resource suppliers. C. any contractual obligation to labor or material suppliers. D. compensations that must be received by resource owners to ensure their continued supply.
Which of the following is a stock variable?
a. The interest rate b. Real GDP c. Investment in physical capital d. Physical capital e. Investment in human capital
Which of the following ideas of Adam Smith has religious overtones?
a. comparative advantage b. aggregate demand c. perfect competition d. rational expectations e. invisible hand
Capital gains are profits that you earn on the sale of your
A. labor. B. money. C. financial asset. D. economics textbook.