Refer to the scenario above. If both economies have identical depreciation rate, then:
A) economy A's steady state equilibrium will lie to the left and above economy B's steady state equilibrium.
B) economy A's steady state equilibrium will lie to the right and below economy B's steady state equilibrium.
C) economy A's steady state equilibrium will lie to the left and below economy B's steady state equilibrium.
D) economy A's steady state equilibrium will lie to the right and above economy B's steady state equilibrium.
D
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Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
A. purchase the truck if the real interest rate is less than 5%. B. not purchase the truck if the real interest rate is greater than 1%. C. purchase the truck if the real interest rate is less than 15%. D. purchase the truck if the real interest rate is greater than 5%.
Suppose that the equilibrium nominal interest rate is 4 percent and the equilibrium quantity of money is $1 trillion. At any interest rate above 4 percent,
A) less than $1 trillion will be demanded and bond prices will fall. B) more than $1 trillion will be supplied and bond prices will fall. C) there is a shortage of money and the interest rate will rise. D) more than $1 trillion will be supplied and the interest rate will rise. E) less than $1 trillion will be demanded and bond prices will increase.
Which of the following is true of a monopoly? a. The price charged by a monopoly is lower than that in other markets. b. New firms can enter a monopoly
c. A monopolist is a price setter. d. Substitutes are available for a monopolist's products.
The decisions of buyers and sellers that affect people who are not participants in the market create
a. market power. b. externalities. c. profiteering. d. market equilibrium.