The idea that saving equals investment in the Solow model means that a steady state can be reached only when
A. sf(k) = (n + d)k.
B. sf(k) = (s + d)k.
C. s = n + d.
D. s = k.
Answer: A
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In both perfect competition and monopolistic competition, each firm
a. has some monopoly power. b. sells a product that is at least slightly different from those of other firms. c. faces a downward-sloping demand curve. d. has many competitors.
Bureaucratic capture is:
A. when government positions are filled with people who have close ties to the group they are supposed to regulate. B. a source of bias or personal sympathy that interferes with efficiency. C. a specific avenue through which corruption and rent-seeking can occur. D. All of these are true.
To eliminate an inflationary gap, the aggregate demand curve should
A. shift outward. B. become vertical. C. become horizontal. D. shift inward.
By free enterprise, we mean that:
A. individuals are free to produce those products that government agencies determine can be produced profitably. B. individual producers determine how to produce, but government agencies determine what will be produced. C. individuals may obtain resources, organize production, and sell the resulting output in any legal way they choose. D. products are provided free to those who cannot afford to buy them.