On the Solow Diagram, an increase in productivity is shown by ________
A) an upward shift of the depreciation plus capital dilution line
B) an upward shift of the investment function
C) a downward shift of the depreciation plus capital dilution line
D) a downward shift of the investment function
B
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Answer the following statement(s) true (T) or false (F)
1. A drafted army can be unnecessarily costly in two ways: it can be the wrong size or it can consist of the wrong people. 2. A draft is better for society because it is less costly than a volunteer army. 3. The Fabian argument that confiscation of rents would not lower social welfare overlooks the costs of resource misallocation. 4. The use of signals in an economy is both individually rational and socially efficient. 5. Because of adverse selection, no good used cars ever change hands.
Forward-looking households may reduce consumption expenditures today if they believe that the government is currently
A) borrowing to run a budget deficit, and to pay back these loans in the future may require higher taxes. B) running a budget surplus, and the increase in the government's supply of money will generate inflation in the future. C) experiencing a balanced budget, and will therefore not be implementing any fiscal policy to stabilize the economy. D) cutting federal spending to decrease the budget deficit, which will raise the real interest rate, the inflation rate , and the unemployment rate.
Of the three primary tax sources of revenue for the U.S. federal government, which of the following has decreased the most as a percentage of GDP since 1962?
A) corporate income taxes B) social insurance taxes C) sales and excise taxes D) individual income taxes
Joe's Imports is currently the only dealer for imported Sporto autos on the East Coast, but Fred's Autos may enter the import market and start selling Sporto cars in the East Coast market during the coming year
Joe's Imports can pay the Sporto manufacturer for exclusive East Coast marketing rights, which would deter the entry of Fred's Autos into the market. The payoffs from the possible actions are measured in millions of dollars per year, and the possible outcomes of the sequential entry game are summarized in the following matrix: Fred's Autos enters Fred's Autos does not enter Joe's Imports buys rights ---- 50, 0 Joe's Imports does not buy 40, 40 80, 0 What is the equilibrium outcome from this sequential entry game? A) Joe's Imports buys the marketing rights, and Fred's Autos cannot enter the market. B) Joe's Imports buys the marketing rights, and Fred's Autos enters the market. C) Joe's Imports does not buy the marketing rights, and Fred's Autos enters the market. D) Joe's Imports does not buy the marketing rights, but Fred's Autos does not enter the market.