Neutral technological progress occurs when
a. higher output levels are achieved with the same quantity and combinations of factor inputs.
b. higher output levels are achieved by more capital intensive methods.
d. higher output levels are achieved by more labor intensive methods.
e. higher output levels are achieved.
A
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following will raise the expected marginal product of capital?
A) a reduction in the interest rate B) increased business optimism C) an investment tax credit D) a reduction in the corporate profits tax
Technology spillovers are examples of negative externalities
a. True b. False Indicate whether the statement is true or false
Which of the following best describes the idea of excess capacity in monopolistic competition?
a. Firms produce more output than is socially desirable. b. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve. c. Due to product differentiation, firms choose output levels where price equals average total cost. d. Firms keep some surplus output on hand in case there is a shift in the demand for their product.