Gross investment is equal to
A) depreciation minus net investment.
B) net investment plus capital stock.
C) depreciation plus net investment.
D) net investment minus capital stock.
C
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According to the Solow model, given the levels of total efficiency units of labor and technology:
A) efficiency units of labor do not play any role in the determination of steady-state equilibrium level of GDP. B) there is a maximum fixed level of GDP that an economy can achieve by increasing savings. C) increases in the savings rate is the sole reason for sustained economic growth. D) increases in the rate of physical capital accumulation can be the sole reason for sustained economic growth.
A vertical demand curve has an elasticity of demand equal to zero.
Answer the following statement true (T) or false (F)
Gordon characterizes Modigliani as a prominent activist yet several implications of his life cycle hypothesis support the non-activists. One of these implications is
A) transitory increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively stable. B) permanent increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively stable. C) transitory increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively unstable. D) transitory increases in income associated with the business cycle are to last a lifetime so current consumption is relatively stable.
The breakeven price of a perfectly competitive firm is obtained at the point of intersection between the marginal revenue and marginal cost curves
Indicate whether the statement is true or false