If capital deepening increases from $100 to $150 and this increase results in worker's productivity increasing from $60 to $70, and if there were 100 workers, then GDP would increase by
a. $10,500
b. $6,000
c. $1,500
d. $7,000
e. $1,000
E
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When the policy rate hits its lower bound and inflation keeps falling, this portion of the Monetary Policy curve is
A) downward sloping. B) upward sloping. C) flat. D) undetermined.
Expansions of aggregate demand cause the economy to move along what is essentially a vertical aggregate supply curve when
A) wage increases catch up to inflation. B) higher prices can reduce interest rates no further. C) money supply growth rises to equal the rate of aggregate demand expansion. D) from a recession level of output, full employment is reached.
By restricting the amount of precious metals going into the colonies, the British significantly hindered economic growth in colonial America
Indicate whether the statement is true or false
Market failures occur when
A) externalities exist. B) economic efficiency increases. C) there is an increase in demand. D) there is a change in quantity demanded.