Are there key differences between an increase in the capital stock and an improvement in the level of technology?
There is no significant difference to an economy between an increase in the capital stock and an improvement in the level of technology. From a graphical perspective, both changes will shift the production function upward, indicating an increase in output with the same level of labor. In terms of productivity, both of these changes increase the productivity of labor, the key variable in determining the economy's standard of living.
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Assume the income of consumers of good X (a normal good) increases. What occurs at the initial equilibrium price for X that signals market participants that the equilibrium price must change?
A) A surplus is created by an increase in supply. B) A surplus is created by a decrease in demand. C) A shortage is created by an increase in demand. D) A shortage is created by a decrease in supply.
An increase in consumer wealth would shift the aggregate demand curve rightward
Indicate whether the statement is true or false
In a world where people would have no prior information about where they are in an income distribution, given the choice, Rawls argues that they would prefer
a. an income distribution that is relatively equal b. that everyone has the same work opportunities and then let incomes be what the market generates c. to rely on their abilities so accept high levels of income inequality d. that private property be transformed to government property to safeguard their incomes e. less economic assistance to the poor because it distorts the price system
An expansionary or loose monetary policy:
A. stimulates borrowing. B. reduces borrowing. C. lowers interest rates.