If a natural disaster destroys some of the capital stock, then the classical model predicts
a. labor demand, real wages, and output will fall.
b. labor demand and real wages will rise, output will fall.
c. the labor market remains unchanged but output falls.
d. None of the above
A
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Refer to Figure 13-4. Given the economy is at point A in year 1, what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?
A) 0.3% B) 1.1% C) 2.7% D) 3.7%
Which of the following would prevent "free entry" into a market?
A. Externalities B. Open trade C. Patents D. Opportunity costs
Parallel markets is another term for:
a. government interventions. b. interbank trades. c. black markets. d. trade in goods and in services
Economists also refer to the normal rate of return on investment as
A. the equity kicker. B. a residual cost. C. the fixed cost of entrepreneurship. D. the opportunity cost of capital.