Increases in the productivity of labor result partly from:
A. the law of diminishing returns.
B. improvements in technology.
C. reductions in wage rates.
D. increases in the quantity of labor.
Answer: B
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The MCE function represents the
a. marginal cost of enforcement incurred by the government b. marginal cost of the externality linked to environmental pollution c. market cost of a given environmental policy initiative d. extra cost of the engineering approach
Neoclassical growth theory is based on the proposition that real GDP per person grows when
A) the population growth rate increases. B) the population growth rate decreases. C) technological advances occur. D) saving decreases.
Keynesians believe that
A) the link between money and aggregate demand is very strong. B) interest rates will immediately respond to a change in investments. C) fluctuations in the price level are a source of stability. D) the interest rate will not necessarily respond to a drop in investments.
In order for a voluntary agreement to be reached in general, transaction costs should be
A) infinite. B) high relative to expected marginal benefits of the agreement. C) low relative to expected marginal benefits of the agreement. D) determined by the Environmental Protection Agency.