Suppose there is a decrease in the saving rate. Explain what effect this decrease in the saving rate will have on the rate of growth of output per worker
What will be an ideal response?
As described in answers for the previous chapter, a reduction in the saving rate will only temporarily affect the growth rates of Y and Y/N. Once the new balanced growth equilibrium is achieved, the growth rates of Y and Y/N will return to their original levels.
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If the currency drain increases, how can the Fed adjust the monetary base to offset the effect on the quantity of money?
What will be an ideal response?
If a country's currency is "pegged" to the dollar, its exchange rate is
A) floating. B) flexible. C) undervalued. D) fixed.
Concentration increases in an industry
a. if the larger firms gain control of important resources, squeezing out smaller firms. b. if some firms become technologically superior over time. c. if innovation increases plant size of some firms and lowers their cost. d. All of the above are correct.
The major similarity between monopolistic competition and perfect competition is
A. both assume products are differentiated. B. that both assume many buyers and sellers. C. the shape of the demand curve. D. price equals marginal revenue in each.