If households fail to recognize that debt-financing represents a future liability (in the form of higher taxes), they will tend to consume
a. less and pass less net wealth on to future generations.
b. more and pass more net wealth on to future generations.
c. less and pass more net wealth on to future generations.
d. more and pass less net wealth on to future generations.
D
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A rise in the money wage rate shifts the
A) AD curve rightward. B) AD curve leftward. C) AS curve rightward. D) AS curve leftward. E) potential GDP curve rightward.
The Romer model is distinct from the Solow model in that the former assumes that ________
A) technology is fixed B) an increase in price affects quantity demanded, rather than demand C) some labor is devoted to producing new technology D) output per worker is fixed
An increase in the price of the good measured along the vertical axis will cause the budget line to
A. shift outward. B. shift inward. C. become steeper. D. become flatter.
If a purely competitive firm shuts down in the short run:
A. its loss will be zero. B. it will realize a loss equal to its total variable costs. C. it will realize a loss equal to its total fixed costs. D. it will realize a loss equal to its explicit costs.