Given the aggregate production function Y = A , the Solow residual equals ________ when Y is 60, K = 5 and L = 5
A) 2.4
B) 35
C) 25
D) 12
D
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Explain why correlation does not always imply causation. Does causation always imply positive correlation? Explain your answer
What will be an ideal response?
To raise economic growth, a tighter fiscal policy should be accompanied by a ________ money supply in order to keep the ________ from falling
A) larger, output ratio B) larger, real interest rate C) smaller, output ratio D) smaller, real interest rate
President Obama needed to get Congressional approval to enact measures to boost the economy. The time involved to formulate and get approval for these policies are called:
A. inside lags. B. outside lags. C. automatic stabilization. D. crowding in.
The rational-expectations hypothesis suggests that errors in forecasting future inflation rates are due to
A. the fact that people consistently underestimate future inflation. B. the fact that people assume that the current inflation rate will continue into the future. C. the fact that people consistently overestimate future inflation. D. random, unpredictable events.