Explain the role played by technological change in classical growth theory, neoclassical growth theory, and new growth theory
What will be an ideal response?
Technology plays a secondary role in classical growth theory. While technology might increase real GDP in the classical growth model, population changes drive real GDP per person back to a subsistence level of income. Technology also plays a secondary role in neoclassical growth theory. Neoclassical theory has technological change bringing about an increase in real GDP but diminishing returns brings an end to economic growth. The new growth theory emphasizes the role of technological change in creating continuous growth because entrepreneurs have an incentive to develop new technologies as a means of generating profits for themselves.
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Refer to Figure 4.3. All else equal, an increase in the government's budget deficit accompanied by a decrease in corporate taxes would cause which of the following shifts?
A) S1 to S2 and D1 to D2 B) S2 to S1 and D1 to D2 C) S1 to S2 and D2 to D1 D) S2 to S1 and D2 to D1
Which of the following statements is true?
A) The expected return and standard deviation of return are greater for common stock than for U.S. Treasury bills. B) The expected return on common stocks is greater than the expected return on U.S Treasury bills, but the standard deviation of return for common stocks is less than the standard deviation of return for U.S. Treasury bills C) The expected return on common stocks is less than the expected return on U.S Treasury bills, but the standard deviation of return for common stocks is greater than the standard deviation of return for U.S. Treasury bills. D) The expected return and standard deviation of return are less for common stocks than for U.S. Treasury bills.
If a firm produces nothing, then its:
A. variable costs equal zero. B. fixed costs equal zero. C. total costs equal zero. D. All of these are true.
If the exchange rate rises, domestic goods become relatively ______ expensive. This change in the affordability of domestic goods makes domestic goods _____ attractive to foreigners. So, _______ ______
Fill in the blank(s) with correct word