A central proposition of the new growth theory is that
A) growth will cease but prosperity will persist.
B) knowledge is not subject to diminishing returns.
C) government direction and oversight is necessary for consistent growth.
D) growth is often just an illusion fostered by growth accounting.
B
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Spencer and Brander's model highlights the conventional assumption that
A) government involvement in business or in the economy tends to fail. B) government subsidies tend to waste taxpayer's money. C) government subsidies cannot create a successfully competing export. D) government tends to distort when it displaces Adam Smith's Invisible Hand. E) government subsidies can produce profits that exceed the subsidy's value.
Refer to the accompanying figure. When P = 4, the price elasticity of demand for the demand curve D1 is ________ and D2 is ________.
A. 1/3; 3 B. 3; 3 C. 1/3; 2/3 D. 2/3; 1/3
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. 
Given the above, if the firm produces 20 units of output, what is average fixed cost?
A. $600 B. $150 C. $50 D. $1.50 E. none of the above
Other things being equal, the international value of foreign currencies will increase against the U.S. dollar if:
A. U.S. citizens reduce spending on imports B. The U.S. Federal Reserve raises real interest rates C. There is an increase in the number of foreign tourists in the United States D. There are withdrawals of funds by foreigners from U.S. money markets