Productivity growth slowed rapidly after 1973. Bruno and Sachs argue that the slowdown is partially explained by
A) reduced growth in capital per capita since increasing numbers of women entered the labor force.
B) the reduction in savings rates caused by inflation and the U.S. tax system.
C) the "residual" nature of technological change.
D) the rapid increase in the relative price of energy.
D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
If the Fed sells government securities
A) commercial bank reserves will decrease. B) the government's debt will decrease. C) commercial bank reserves will increase. D) there will be no effect on the quantity of money.
Refer to above figure. Two countries exist in this model, P and R. P is relatively labor (L) abundant, as is evident in the bottom right horizontal axis
If Country P were to be completely specialized in the labor-intensive product, C, it would be producing at point 4. In fact, it produces both C and P, at point 5. The (autarky) relative price of C (in terms of F) of Country P is at point 3; and of Country R at point 1. If trade were to open up between these two countries, which would export C and which would export F? Is this consistent with the Heckscher-Ohlin model? Explain.
The real wage can increase only if the nominal wage increases
a. True b. False