All else being equal, a permanent decrease in the saving rate in a steady-state economy would cause
A) an increase in the capital—labor ratio and an increase in consumption per worker.
B) an increase in the capital—labor ratio and a decrease in consumption per worker.
C) a decrease in the capital—labor ratio and a decrease in consumption per worker.
D) a decrease in the capital—labor ratio and an increase in consumption per worker.
C
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The aggregate demand curve shifts to the right when the Fed:
A. increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function. B. decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function. C. decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function. D. increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.
As the U.S. price level rises relative to price levels in other countries, U.S. _____
a. consumption and net exports will both decrease b. consumption and net exports will both increase c. consumption would increase and net exports will decrease d. consumption would decrease and net exports will increase e. consumption and net exports will remain constant
Protectionist policies often seek to shield domestic producers and domestic workers from ________ competition.
a. foreign b. local c. domestic d. unfair
Which of the following is true of labor unions? a. They allow employees to participate in internal decision making. b. They can increase the amount of labor demanded by firms. c. They help to reduce wage differentials among co-workers
d. They can raise the wage above the market equilibrium level.