How would each of the following changes affect the steady-state values of the capital-labor ratio, output per worker, and consumption per worker?(a)A change in the composition of the capital stock raises the depreciation rate.(b)A change in social mores lowers the population growth rate.(c)Government tax policies change to encourage a higher saving rate.(d)A supply shock reduces productivity sharply.
What will be an ideal response?
| (a) | The rise in d reduces the capital-labor ratio, as well as output per worker and consumption per |
| (b) | The decline in n raises the capital-labor ratio, as well as output per worker and consumption |
| (c) | The rise in s raises the capital-labor ratio, as well as output per worker and consumption per |
| (d) | The decline in productivity shifts the production function down, reducing the capital-labor |
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The money aggregate M1 consists of
A) currency and savings accounts. B) currency and checking deposits, including traveler's checks. C) only checking deposits and time deposits. D) checking accounts, savings accounts and Treasury bills.
A manager invests $400,00 . in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . This affects
a. Economic profits b. Accounting profits c. Both a and b d. None of the above
Protectionism achieves which of the following goals?
A. Protection of infant industries. B. Greater consumption possibilities through greater specialization. C. Protection of absolute advantage. D. Protection of comparative advantage.
Figure 7.5
The consumer must decide how to split $20 between spending and saving.Refer to Figure 7.5. If the consumer is subject to present bias, he/she will maximize utility at a marginal utility per dollar of ________ utils for consumption and ________ utils for saving.
A. 15; 15 B. 15; 30 C. 30; 15 D. 30; 30