Describe the steady state in the Solow growth model
What will be an ideal response?
In steady state in the Solow growth model, the economy is in equilibrium with the capital-labor ratio and real GDP per hour worked constant, but capital, labor, and real GDP are growing. The steady state is the long-run equilibrium, so an economy not at the steady state will move toward it.
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When a change in the price level causes a change in the purchasing power of currency, which then changes planned real expenditures at all income levels, it is called
A) the real-balance effect. B) the open-economy effect. C) the substitution effect. D) the interest rate effect.
In the year after the stock market crash of 1929, stock prices on average ___
a. were lower than they had been in decades. b. were lower than in 1929 but higher than in the mid-1920s. c. rebounded to a level higher than in 1929. d. cannot be reliably calculated because no buyers could be found for many stocks, and hence no prices were reported.
A bank's secondary reserves include its
A. holdings of long-term bonds issued by large corporations. B. passbook saving account balances (a liability to the bank). C. holdings of corporate stock. D. holdings of 6-month Treasury bills.
Why does core inflation not include energy or food prices?
What will be an ideal response?