In the classical theory of employment a decline in the rate of interest will _____ saving and _____ investment.
Fill in the blank(s) with the appropriate word(s).
decrease; increase
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The ________ measures the change in the demand of a good due to a percentage change in the consumer's income
A) substitution effect of a price change B) income effect of a price change C) cross-price elasticity of demand D) income elasticity of demand
The size of the effect of a given deposit of cash into a demand deposit account on the money supply is smaller:
a. the greater the fraction of money people want to hold as currency and the greater the fraction of deposits banks want to hold as excess reserves. b. the greater the fraction of money people want to hold as currency and the smaller the fraction of deposits banks want to hold as excess reserves. c. the smaller the fraction of money people want to hold as currency and the greater the fraction of deposits banks want to hold as excess reserves. d. the smaller the fraction of money people want to hold as currency and the smaller the fraction of deposits banks want to hold as excess reserves.
For a monopolistic competitor experiencing a? short-run loss, price is? ________ average total cost and? ________ marginal cost.
Fill in the blank(s) with the Appropriate word (s).
Country X produces two goods, guns and roses, using labor and land. Assume that production of guns is relatively labor-intensive, and production of roses is relatively land-intensive. Suppose a large number of workers from a neighboring country migrate to Country X. Carefully explain all the predictions of the Rybczynski theorem about the changes in output of both guns and roses in Country X. Be certain to explain any shifts in resources from one industry to the other.
What will be an ideal response?