Government policies which reduce the price of education increase ________ in the AK growth models or increase ________ in the production function for new ideas in the two-sector growth model
A) the capital stock; the productivity of researchers
B) the efficiency index; the size of the labor force
C) the proportion of the labor force devoted to research; the capital stock
D) the productivity of researchers; the size of the labor force
A
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Suppose a price index is formed to measure changes in the price level between 1989 to 1995. If the price index focuses on the year-to-year costs of the typical market basket purchased in 1989, then the reported price changes
a. seem worse for consumers than they really are. b. seem better for consumers than they really are. c. accurately reflect changes in people's levels of satisfaction. d. may overestimate or underestimate the effects of price changes, depending on whether consumers' indifference curves are relatively flat or steep.
Use the following graph to answer the next question.
In the diagram, Qf is the full-employment output. If the economy's present aggregate demand curve is AD2,
A. the most appropriate fiscal policy is a reduction in government purchases or an increase of taxes. B. the most appropriate fiscal policy is an increase in government purchases or a reduction of taxes. C. the government should undertake neither an expansionary nor a contractionary fiscal policy. D. the economy is achieving its maximum possible output.
Which school of economics held that individuals and business firms learn, through experience, to instantaneously anticipate the consequences of changes in monetary and fiscal policy?
A. The Keynesians B. The monetarists C. The supply-siders D. The rational expectationists
What is the domestic price of sugar in a closed economy?
A. $2,000/ton B. $500/ton C. $3,000/ton D. $1,000/ton