Is it possible for a country to experience a permanent increase in output per worker over time? If so, how can this occur?
What will be an ideal response?
Yes, it is possible for sustained growth to occur. For sustained growth to occur, technological progress must occur. Changes in the saving rate will not cause sustained changes in growth rates.
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Using the points on the diagram below, identify which combinations of these points illustrate diminishing returns to capital. Give a brief explanation to support your answer
What will be an ideal response?
If reckless drivers are more likely to buy automobile insurance than safe drivers are
A) a moral hazard has occurred. B) adverse selection has occurred. C) the market for insurance is efficient. D) then automobile insurance will be fairly priced.
To prevent the dollar from depreciating, the U.S. central bank can try to fix the currency value of the dollar when they
A) buy U.S. dollars in the foreign exchange market. B) sell U.S. dollars in the foreign exchange market. C) abandon the U.S. dollar and use another country's currency as its legal currency. D) buy foreign currencies in the foreign exchange market.
When a shift in the aggregate supply curve is caused by a change in the price level, the aggregate demand curve also shifts
Indicate whether the statement is true or false