In the long run, output is determined solely by the supply of capital and the supply of labor, not the price level.
Answer the following statement true (T) or false (F)
True
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Critics of Keynesian fiscal policy argue that deficit spending will not stimulate the economy, because higher interest rates will discourage consumption and investment. This argument is known as the:
a. deficit-substitution effect. b. multiplier effect. c. burden-of-debt effect. d. crowding-out effect.
Outsourcing is a term increasingly used to refer to the act of:
A. hiring illegal immigrants. B. replacing relatively expensive American workers with low-wage workers overseas. C. importing raw materials into the United States from other countries. D. exporting final goods to other countries.
Measurements of TFP indicate that the East Asian success story is based on
A) a significantly different economic model from the one followed in the West. B) unusually large amounts of innovation. C) rapid increases in the education of the work force. D) high amounts of savings and investment.
Hermione is considering an investment that has a ¾ chance of paying a 10 percent rate of return and a ¼ chance of paying 2 percent. What is the average expected rate of return on the investment?
A. 2 percent. B. 6 percent. C. 8 percent. D. 10 percent.