Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4. A 10% increase in capital would increase the current level of output to
A. 5050.
B. 5200.
C. 5020.
D. 5500.
Answer: B
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Which of the following statements is consistent with the views of Joseph Schumpeter?
A) An economy benefits from firms having market power because these firms are more likely to be able to commit funds for research and development. B) Enforcement of antitrust laws is necessary to promote competition among firms. C) A lack of competition discourages firms from developing new technologies. D) Research and development by competitive firms is responsible for most technological changes.
If the Federal Reserve eliminated all reserve requirements the most likely result would be
A) a large number of depository institution failures because they would not have enough liquidity. B) the Federal reserve would be unable to control the money supply. C) banks would no longer be able to clear checks at the Federal Reserve because there would be no required reserves. D) the size of the money multiplier might fluctuate considerably making the Federal Reserve's job of controlling the money supply more difficult.
According to the new Keynesian economists, SAS adjusts slowly to a change in AD because of
A) high menu costs. B) staggered overlapping wage contracts. C) efficiency wages. D) All of the above combinations explain slow adjustments in SAS.
Which of the following is not a potential supplier of real loanable funds to the real loanable funds market?
a. Domestic savers. b. Foreign savers. c. Domestic businesses. d. Foreign governments. e. All of the above are potential suppliers.