Refer to Figure 10-6. The market is in equilibrium. If the government budget deficit rises, which of the following would you expect to see?
A) The budget deficit will have no impact on the quantity of loanable funds demanded by firms.
B) The quantity of loanable funds demanded by firms will rise above $120 million.
C) The interest rate will fall below 4 percent.
D) The quantity of loanable funds demanded by firms will fall below $120 million.
D
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Changes in all of the following will shift the demand curve for labor except
A) the real wage rate. B) the quantity of capital. C) the technology of production. D) the skill level of workers.
Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is TRUE?
A) The production function has decreasing returns to scale. B) The production function has increasing returns to scale. C) The production function has constant returns to scale. D) Returns to scale vary with the level of output.
Since the late 1970s, economic growth has
a. occurred at a rapid pace compared to the period 1950-1973 b. improved living standards across the entire population c. maintained approximately constant living standards across the entire population d. improved the living standards of less-skilled workers while highly skilled workers have become worse off e. improved the living standards of highly skilled workers while less-skilled workers have become worse off
When we add a personal income tax to the macroeconomic model, the
a. multiplier becomes larger. b. multiplier becomes smaller. c. expenditures schedule shifts upward. d. expenditures schedule becomes steeper.