Suppose a country has experienced relatively steady growth of aggregate real Gross Domestic Product (GDP). A higher population growth tends to
A. increase the level of economic freedom.
B. increase the level of dead capital.
C. increase the growth of per capita real GDP.
D. reduce the growth of per capita real GDP.
Answer: D
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Conflict resolution of the stockholder-lender conflict in larger banking-oriented firms is most effectively accomplished by
A) financial intermediation (monitoring). B) financial intermediation (ownership consolidation). C) corporate governance. D) None of the above.
Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand are known as
A) fixed exchange rates. B) gold exchange rates. C) flexible exchange rates. D) IMF exchange rates.
The silly clothes worn by a circus clown are an example of
a. market inefficiency b. capital goods c. labor, if it is used by labor exclusively d. human capital e. entrepreneurship, if the clown becomes more creative wearing the clothes
The substitution effect reflects how a consumer will react to a different:
A. level of nominal income. B. marginal rate of substitution. C. level of real income. D. market rate of substitution.