The marginal rate of technical substitution is equal to
A) The ratio of the change in capital to the marginal physical product of capital.
B) The ratio of the change in capital to the change in labor.
C) The ratio of the level of capital to the level of labor.
D) The ratio of the change in output to the ratio of two input prices.
Answer: B
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An example of a poverty trap is
a. extended time periods without war b. a lack of mineral wealth c. a dysfunctional or corrupt government d. laws and regulations to help detect fiscal fraud e. None of the answers is correct
Traditional Keynesians argued that when wages are rigid, changes in output result in:
a. small changes in goods market prices and a flat aggregate supply curve. b. large changes in goods market prices and a flat aggregate supply curve. c. large changes in goods market prices and a steep aggregate supply curve. d. small changes in goods market prices and a steep aggregate demand curve. e. small changes in goods market prices and a horizontal aggregate demand curve.
To see if the effect of an explanatory variable has changed over a certain time period, we can interact the time dummy with that variable.
Answer the following statement true (T) or false (F)
If real interest rates rise in the United Kingdom relative to the United States, then this event is most likely to cause the British pound to:
A. Depreciate and the U.S. dollar to depreciate B. Depreciate and the U.S. dollar to appreciate C. Appreciate and the U.S. dollar to appreciate D. Appreciate and the U.S. dollar to depreciate