The aggregate production function is _____ because the rate of increase of output per capita diminishes as more capital is used
a. downward sloping
b. convex from below
c. concave from below
d. inverted U-shaped
c
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Supply-side economics is based on the theory that:
a. budget deficits will stimulate demand, output, and employment. b. budget deficits will lead to higher interest rates, which will weaken their expansionary impact. c. higher tax rates will increase tax revenues. d. increases in aggregate supply lower the price level.
A reduction in the marginal tax-rate includes an income effect that tends to increase savings
a. True b. False Indicate whether the statement is true or false
If saving exceeds investment, then the level of GDP will
A. increase. B. remain constant. C. decrease. D. rise above potential GDP.
The business cycle is best defined as alternating periods of increases and decreases in the level of economic activity.
Answer the following statement true (T) or false (F)