Suppose an economy has an increase in labor input of 60 percent, while output has increased by 100 percent. Assuming no change in total factor productivity, calculate the percentage increase in the capital input
(Use the Cobb-Douglas production function Y = A .)
2Y = A . Dividing this by the original production function yields 2 = . Solve for x = 3.37. The capital input has increased by 237 percent.
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If investment becomes more interest-sensitive,
A) monetary policy will have a smaller impact on the equilibrium interest rate. B) monetary policy will have a greater impact on equilibrium income. C) fiscal policy will have a smaller impact on equilibrium income. D) fiscal policy will have a larger impact on the equilibrium interest rate.
We know that increases in population increase the market demand for various goods. The prices of those goods will increase the most if the elasticity of supply is
a. very large b. equal to one c. greater than 3 d. very small e. finite
Which of the following bonds has the highest interest rate?
a. a high credit risk and a short term. b. a low credit risk and a short term. c. a long term and a high credit risk. d. a long term and a low credit risk.
Compared to the averages for post World War II recessions, the recession of 2007-2009 was ________ in duration and the decline in real GDP was ________
A) longer; greater B) longer; smaller C) shorter; greater D) shorter; smaller