The capital-labor ratio will tend to increase over time when
A) investment per worker equals saving per worker.
B) investment per worker exceeds saving per worker.
C) investment per worker is less than depreciation per worker.
D) saving per worker equals depreciation per worker.
E) output per worker is less than capital per worker.
B
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A government policy that is consistent with real business cycle theory would be for
A) government to vary its spending in response to shocks to total factor productivity. B) the monetary authority to expand and contract the nominal money supply in response to shocks to total factor productivity. C) government to smooth out tax distortions over time. D) government to vary its lump-sum tax collections in response to changes in total factor productivity.
The largest spending category for state governments is
A) welfare. B) health care. C) education. D) highway construction.
In the balance of payments, any transaction that leads to a receipt by a resident of a country or its government is a(n)
A) asset. B) minus item. C) deficit item. D) surplus item.
A productivity decrease would be illustrated by a shift in the production function
a. downward. b. leftward. c. upward. d. rightward.