Suppose the economy is initially in the steady state. An increase in the depreciation rate (?) will cause
A) a reduction in K/N.
B) a reduction in Y/N.
C) a reduction in C/N.
D) all of the above
E) none of the above
D
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A long-run aggregate supply curve may graphically be represented as a
A) vertical line. B) a downward sloping line. C) an upward sloping line. D) horizontal line.
Critics of the RBC approach argue that it's hard to find productivity shocks large enough to cause business cycles. What is the RBC counterargument to this criticism?
A) Business cycles are always and everywhere a monetary phenomenon. B) Wars and military buildups could be considered productivity shocks. C) Business cycles could be caused by the accumulation of small productivity shocks. D) Business cycles are often caused by unobservable productivity shocks, which aren't apparent at the time they occur.
Which of the following is likely to lead to a decrease in the demand for tennis balls?
A. An increase in the price of tennis balls. B. An increase in the price of tennis racquets. C. An increase in the expected future price of tennis balls. D. An increase in the price of the rubber used to make tennis balls.
Winona’s government advises its citizens to save as much money as possible. What will most likely be the result of this policy?
a. little economic growth b. rapid economic growth c. unchanged economic growth d. steady economic growth