Answer the following statement(s) true (T) or false (F)
1. If the marginal propensity to save is 0.25 in an economy with no taxes and no imports, the marginal propensity to consume is 1.25.
2. Between 2003 and 2010, the unemployment rate in Ft. Myers, Florida, decreased from 13% to 3%.
3. Inventories are counted as investment because inventories are a source of future sales.
4. In a simple economy with no taxes, government spending, exports, or imports, if disposable income increases by $500 and $450 is consumed, $950 is saved.
1. False
2. False
3. True
4. False
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If the actual capital stock exceeds the desired capital stock due to a cycle of overbuilding, then
A) net investment will fall dramatically. B) net investment will increase dramatically. C) net investment will not change. D) the effect on net investment is unknown.
An increase in price expectations in the Keynesian model will shift
a. labor demand and aggregate supply to the left. b. labor demand to the left and aggregate supply to the right.. c. labor demand and aggregate demand to the right. d. labor supply and aggregate supply to the left. e. labor supply to the right and aggregate supply to the left.
Last year an economy produced 3400 hurleys, 3000 footballs and 2000 rugby balls. The price of hurleys was €30, the price of footballs was €20 and the price of rugby balls was €25. Nominal GDP was:
(a) €212,000. (b) €660,000. (c) €420,250. (d) Cannot be computed.
In Sewei's lawnmowing business, in order to produce each mowed lawn, Sewei must hire exactly one unit of capital (a lawnmower) and exactly one unit of labor. Describe the elasticity of substitution between labor and capital
What will be an ideal response?