How would each of the following changes affect the steady-state values of the capital—labor ratio, output per worker, and consumption per worker? (a) A change in the composition of the capital stock raises the depreciation rate
(b) A change in social mores lowers the population growth rate. (c) Government tax policies change to encourage a higher saving rate. (d) A supply shock reduces productivity sharply.
(a) The rise in d reduces the capital—labor ratio, as well as output per worker and consumption per worker.
(b) The decline in n raises the capital—labor ratio, as well as output per worker and consumption per worker.
(c) The rise in s raises the capital—labor ratio, as well as output per worker and consumption per worker.
(d) The decline in productivity shifts the production function down, reducing the capital—labor ratio, as well as output per worker and consumption per worker.
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Refer to Figure 14.1. Other things equal, a decrease in the target inflation rate is best represented as a movement from
A) point A to point B. B) point C to point B. C) point A to point C. D) point B to point C.
Social Security is an earmarked tax
a. True b. False
Individuals, firms, and nations should specialize in those activities which have the highest marginal cost
a. True b. False Indicate whether the statement is true or false
Which of the following is not correct?
a. Poverty is long-term problem for relatively few families. b. Measurements of income inequality usually do not include in-kind transfers. c. Measurements of income inequality use lifetime incomes rather than annual incomes. d. Measurements of income inequality would be more meaningful if they reflected permanent rather than current income.