If the capital—labor ratio is above the Golden Rule capital—labor ratio, then in the steady state,
A) capital per worker is above its maximum.
B) output per worker is less than it would be at the Golden Rule capital—labor ratio.
C) investment per worker exceeds output per worker.
D) consumption per worker is not at its maximum.
D
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Explain the Law of Demand
What will be an ideal response?
The substitution effect of a price increase causes a decrease in the quantity of an inferior good demanded
Indicate whether the statement is true or false
Why do higher interest rates increase adverse selection problems in the loan market?
A) Higher interest rates reduce the gains from economies of scale. B) As interest rates rise, the creditworthiness of the average loan applicant declines. C) Higher interest rates reduce information problems in the loan market. D) At higher interest rates fewer investment projects are profitable.
The cost of reducing unemployment more rapidly by expansionary fiscal and monetary policies is a permanently higher inflation rate.
Answer the following statement true (T) or false (F)