Use the following table to answer the question below. Jake's Production Possibilities ScheduleJane's Production Possibilities SchedulePounds of Green BeansPounds of CornPounds of Green BeansPounds of Corn01600801012020602080404030406020400800Without trade, Jake consumes 20 pounds of green beans and 80 pounds of corn, and Jane consumes 40 pounds of green beans and 40 pounds of corn. If the terms of trade are 1 pound of green beans for 3 pounds of corn, and Jake sells Jane 72 pounds of corn, then the gains from trade for Jake are ________ pounds of green beans and ________ pounds of corn with trade and specialization.
A. 16, 32
B. 8, 4
C. 4, 8
D. 32, 16
Answer: C
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Holding other factors constant, if Congress passes a 5% investment tax credit under which a firm receives $5 in tax refunds from the government for every $100 it spends on new capital equipment, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.
A. increase; decrease B. increase; increase C. decrease; increase D. increase; not change
Refer to the information above. Which of the following equals the annual growth rate of "effective labor" in the steady state in this economy?
A) 2% B) 3% C) 5% D) 10% E) 15%
A currency appreciation reduces aggregate demand and raises aggregate supply.
Answer the following statement true (T) or false (F)
Holding other factors constant, a decrease in the tax rate on revenue generated by capital will:
A. decrease investment. B. increase national saving. C. decrease national saving. D. increase investment.