Which of the following is an assumption of the Lewis two-sector model?
a. surplus labor in the rural sector
b. high unemployment in the urban modern sector
c. rising real urban wages
d. rising marginal product of labor in the rural sector
A
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In the ISLM framework a contractionary fiscal policy causes aggregate output to ________ and the interest rate to ________, everything else held constant
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
The necessary ingredients for economic growth and poverty reduction are no mystery, really: education, favorable and efficient institutions, research and development, etc. Macroeconomists are unlikely to have anything useful to say. Comment
What will be an ideal response?
A pottery craftsman is debating attending the crafters fair. It costs $50 to set up the booth and $20 in transportation to get his pottery to the fair. He nets $5 for each of his pieces, number of pots he must sell to make going to the fair worth the cost?
a. 10 b. 12 c. 14 d. 16
Why is it necessary to understand fluctuations in investment if we want to understand the fluctuations in the business cycle?
What will be an ideal response?