A technological improvement will
A. decrease the desired capital stock.
B. increase the desired capital stock.
C. have the same effect on the desired capital stock as an increase in corporate taxes.
D. have no effect on the desired capital stock.
Answer: B
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Which of the following statements is FALSE?
A) Economists empirically test their models. B) Economic models are not used to forecast. C) An economic model should capture only the essential relationships that are sufficient to analyze the particular problem being studied. D) Economic models relate to behavior rather than to individual thought processes.
According to the life-cycle theory of consumption, people tend to save during their main working years.
Answer the following statement true (T) or false (F)
The economic boom of the early 1940s resulted mostly from
a. increased government expenditures. b. falling prices of oil and other natural resources. c. an increase in the growth rate of the money supply. d. rapid developments in transportation, electronics, and communication.
Authorization in 2009 of increased federal spending on "shovel-ready" infrastructure projects was intended to speed up the macroeconomic impact of the deficit spending by
A. paying for the projects with new taxes approved by Congress. B. paying the entire contracted amount up front. C. carefully designing the projects to save or create the largest possible number of jobs. D. avoiding the lengthy design phase of the projects.