Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that the capital per effective worker ratio (K/NA) is
A) growing at a rate of ? + gA + gN.
B) growing at a rate of gA + gN.
C) growing at a rate of gN.
D) growing at a rate of gA.
E) none of the above
A
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Which of the following functions of money would be violated if inflation were high?
a. unit of account b. store of value c. certificate of gold d. medium of exchange
Other things constant, if the interest rate rises, people prefer to hold: a. less money because the opportunity cost of holding money has increased
b. more money because the opportunity cost of holding money has increased. c. less money because the opportunity cost of holding money has declined. d. more money because the opportunity cost of holding money has declined. e. the same amount of money because the opportunity cost of holding money is zero.
When considering the impact of institutions and policies on economic performance, it is most important to focus on
a. long-term economic growth. b. short-term economic growth. c. business cycle fluctuations. d. the labor force participation rate of married women.
The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off
a. True b. False Indicate whether the statement is true or false