If population increases, which of the following will be true?
a. GDP will increase
b. GDP per capita will fall at a faster rate than the increase in population.
c. GDP must increase if the same standard of living is to be maintained.
d. The labor force must increase if the same standard of living is to be maintained.
e. Overall demand will increase, but per capita aggregate demand will remain constant.
c
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If a good is inferior, then it has an income elasticity of demand that is
A) equal to zero. B) greater than zero. C) less than zero. D) greater than one. E) undefined.
Suppose you had information on the sales of similar homes just east and just west of the boundary between two school districts. How could you use those data to estimate the value parents place on the quality of their children's schools?
What will be an ideal response?
If the long-run supply curve in a perfectly competitive industry is upward sloping, this is because
A) firms are different. B) firms are identical. C) input prices rise as the industry expands. D) Either A or C.
Suppose the economy was in equilibrium, and the national government increased spending by $200 billion. Monetarist theory would predict that the nation's:
a. Real risk-free interest rate will rise causing real GDP to fall. b. Real risk-free interest rate will rise causing the monetary base, and therefore, the money supply to rise. c. Real risk-free interest rate will remain unchanged, but the money multiplier will rise. d. Real risk-free interest rate will fall causing real GDP to rise. e. Real risk-free interest rate will rise but real GDP will remain the same.