When drawn against the real interest rate, the output supply curve unambiguously shifts to the right if
A) current capital decreases.
B) current total factor productivity decreases.
C) future total factor productivity decreases.
D) current or future taxes increase.
D
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In the permanent-income hypothesis incorporating rational expectations, the actual cyclical pattern of consumption in the United States is too ________ to justify the assumption that a current change in income ________
A) smooth, is a poor guide to future income changes B) volatile, is a poor guide to future income changes C) smooth, leads to a gradual change in permanent income D) volatile, leads to a gradual change in permanent income
Economic growth is measured as:
a. the quarterly percentage change in nominal GDP. b. total output per year divided by the inflation rate. c. total nominal GDP at the end of each year. d. the percentage change in population growth per year. e. the annual percentage change in real GDP.
In computing GDP, it is essential to
A) avoid double counting. B) include government transfer payments. C) include government tax revenues. D) count all intermediate products directly as they are produced.
A production possibilities frontier that is a downward-sloping straight line implies
A) economies of scale. B) diseconomies of scale. C) economies of scope. D) no economies of scope.