What are the major issues that must be considered in measuring inputs for regression analysis of production functions?
What will be an ideal response?
How is labor to be measured? Can it be measured in hours, and if not, how can the labor actually used in production be expressed? How are materials to be measured? How are capital assets, which have different rates of depreciation and input intensity, to be measured?
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Suppose that the total number of hours (T) is 720 and the wage rate is $10. Suppose further that all income is spent on consumption, so that the vertical axis is also total consumption.
(A) Sketch this graph. (B) Sketch the graph if a 5% consumption tax is imposed. (C) Can you say conclusively that a consumption tax will lower hours worked?
An increase in the sensitivity of private spending (consumption, investment, and net exports) to changes in the interest rate ________ the government purchases multiplier
A) may increase or may decrease B) will not change C) will increase D) will decrease
How is a rise in confidence reflected in the aggregate supply/aggregate demand model?
a. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an inward shift in the AD curve and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level. b. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level. c. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD curve and shift equilibrium from E0 to E1, a higher quantity of output and a lower price level. d. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an inward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a lower price level.
The share of GDP taken by taxes has increased dramatically since the 1960s
a. True b. False Indicate whether the statement is true or false