The introduction of a new technology that raises the marginal product of new capital will:
A. decrease real interest rates and increase the equilibrium quantity of saving supplied and demanded.
B. increase real interest rates and the equilibrium quantity of saving supplied and demanded.
C. decrease real interest rates and the equilibrium quantity of saving supplied and demanded.
D. increase real interest rates and decrease the equilibrium quantity of saving supplied and demanded.
Answer: B
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The only way that a society can produce outside the production possibilities curve is
A. by obeying the Law of Increasing Additional Cost. B. by producing efficiently. C. through economic growth. D. to use the concept of opportunity cost.
If you are traveling in China and you purchase a meal that costs 140 yuan and the current exchange rate is 7 yuan to the dollar, then the price of the meal in U.S. currency is
A. $200. B. $20. C. $10. D. $2.
The supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this change would generate $100 billion in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A) exactly $100 billion because there are no offsetting factors to a tax increase. B) more than $100 billion, because lower income people will work harder when they perceive the tax system to be fairer. C) more than $100 billion because interest rates will also be affected. D) less than $100 billion because some people will respond by working less.
Economic regulation aims to control the price, output, the entry of new firms, and the quality of service in industries in which monopoly appears inevitable or even desirable
a. True b. False