In response to an increase in AD:
a. The price level will increase more in the long run than in the short run
b. Real output will increase more in the long run than in the short run.
c. Both the price level and real output will increase more in the long run than in the short run.
d. Neither the price level nor real output will change in the long run.
a
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Under a tradable pollution permits system (cap and trade), government _____________ the amount of pollution, ___________________ what the price to pollute will be.
A. knows; and polluters immediately know B. doesn't know; and polluters don't immediately know C. knows; but polluters don't immediately know D. doesn't know; but polluters immediately know
The marginal expenditure of a monopsonist is $4. The wage it currently pays is $3. The labor supply curve has a constant elasticity. What is the elasticity of the labor supply?
A) 0.33 B) 0.66 C) 1 D) 3
You have collected data for a cross-section of countries in two time periods, 1960 and 1997, say
Your task is to find the determinants for the Wealth of a Nation (per capita income) and you believe that there are three major determinants: investment in physical capital in both time periods (X1,T and X1,0), investment in human capital or education (X2,T and X2,0), and per capita income in the initial period (Y0). You run the following regression: ln(YT) = ?0 + ?1X1,T + ?2X1,0 + ?3X2,T + ?4X1,0 + ln(Y0) + uT One of your peers suggests that instead, you should run the growth rate in per capita income over the two periods on the change in physical and human capital. For those results to be a parsimonious presentation of your initial regression, what three restrictions would have to hold? How would you test for these? The same person also points out to you that the intercept vanishes in equations where the data is differenced. Is that true? What will be an ideal response?
Generally speaking, the greater the MPS, the:
A. Smaller would be the increase in income which results from an increase in consumption spending B. Larger would be the increase in income which results from an increase in consumption spending C. Larger would be the increase in income which results from a decrease in consumption spending D. Smaller would be the increase in income which results from a decrease in consumption spending