Assume that seigniorage and the government's primary deficit are both zero. A change in the debt-to-GDP ratio depends on just
A) the rate of inflation and total factor productivity.
B) the growth rate of real GDP and the real interest rate.
C) the growth rate of the money supply and the nominal interest rate.
D) the growth rate of nominal GDP and the rate of inflation.
B
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What does the Law of Diminishing Marginal Product state?
What will be an ideal response?
Between 1810 and 1860 the number of workers in manufacturing
a. doubled. b. tripled. c. increased fivefold. d. increased tenfold. e. increased twentyfold.
Most economists agree that a well-designed central bank would:
A. be independent of political pressure. B. make its policy actions difficult to interpret. C. be run by one key policy maker. D. be accountable only to other banks.
Refer to Table 10.2. The marginal product of the fifth unit of labor is:
A. 50. B. 40. C. 30. D. 20.