In the Solow growth model, a change in the capital-labor ratio is equal to
A) (saving - investment).
B) saving + depreciation).
C) (investment - depreciation).
D) (capital stock - labor force).
C
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In order to close a recessionary gap, the Fed would
The long-run aggregate supply curve at potential national income is analogous to:
a. the short-run aggregate demand curve at potential national income. b. the long-run Phillips curve at the natural rate of unemployment. c. the long-run aggregate demand curve at each price level. d. the short-run Phillips curve at the natural rate of unemployment. e. the horizontal portion of the Phillips curve.
Making a pound of wool takes 5 hours in Scotland and 2 hours in Iceland. Making a cord of firewood takes 5 hours in Scotland and 8 hours in Iceland. Suppose that labor is only productive resource needed in these industries, and is fully employed in both nations. Under these conditions, if Iceland produces 4 extra pounds of wool, but Scotland produces 2 fewer pounds of wool, there is a net
A. gain of 2 cords of firewood in the world. B. gain of 1 cord of firewood in the world. C. loss of 2 cords of firewood in the world. D. loss of 1 cord of firewood in the world.
The conclusion that firms in oligopoly always produce where price exceeds marginal cost is true for all models of oligopoly except the
A. price-leadership model. B. collusive oligopoly model. C. Cournot model. D. contestable market model.