In Solow's exogenous growth model, the economy reaches a stable steady state because
A) the marginal return of capital is decreasing.
B) capital is growing at a constant rate.
C) the substitution effect is stronger than the income effect.
D) conditional convergence holds.
A
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When the labor market is in equilibrium so that the quantity of labor supplied equals the quantity demanded,
A) there is no unemployment. B) the economy is at full employment. C) nominal GDP equals real GDP. D) there is no inflation. E) real GDP might be more than, less than, or equal to potential GDP.
We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because
A) perfectly inelastic demand curves are rare. B) an inelastic demand curve may be perfectly inelastic at some times but not others. C) an inelastic demand curve may be elastic at low prices. D) there has never been evidence of a perfectly inelastic demand curve.
In the short run, which factor is not relevant in profit-maximizing output decisions?
a. wage rates b. raw material costs c. mortgage costs d. energy costs e. market price
Many _________ businesses raise _________ of their capital through debt.
a. small; most b. small; none c. large; most d. large; none e. large; all