Realization of gains from trade, entrepreneurial discovery, and investment are largely dependent on
What will be an ideal response?
the presence of institutions and policies consistent with economic freedom
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In economics the assumption is made that consumers and firms will make choices that maximize the ________ of each activity.
a. total net benefit b. total benefit c. sum of total benefit and total cost d. product of total benefit and total cost
The implication of the Solow model is that for sustained growth:
A) the ratio of savings rate to depreciation rate should be constant as the economy grows over time. B) the ratio of savings rate to depreciation rate should increase as the economy grows over time. C) the ratio of capital stock to GDP should decreases the economy grows over time. D) the ratio of capital stock to GDP should be constant as the economy grows over time.
The marginal physical productivity of labor is defined as:
a. a firm's total output divided by total labor input. b. the extra output produced by employing one more unit of labor while allowing other inputs to vary. c. the extra output produced by employing one more unit of labor while holding other inputs constant. d. the extra output produced by employing one more unit of capital while holding labor input constant.
One basic assumption of the aggregate expenditures model is that:
A. The economy is operating at full employment B. There is inflation in the economy C. There is no public sector in the economy D. The average price level in the economy is fixed