The level of capital per person would increase if
A) the average saving rate were higher.
B) the output-to-capital ratio increased.
C) the depreciation rate increased.
D) Both A and B.
D
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Use the following graph of the bicycle market to answer the question below.
S1 and D1 are the original supply and demand curves. D2 and D3 and S2 and S3 are possible new demand and supply curves. Starting from the initial equilibrium (point 1), which point on the graph is most likely to be the new equilibrium after the introduction of technological improvements in bicycle production and successful publicity campaigns by the government on the virtues of bicycling to work?
A. 3 B. 4 C. 5 D. 6
The internet has changed how people shop for clothes, electronics, and other goods. Because of online shopping, many retailers have closed or shut down. How has this affected goods like clothes?
A. The supply of goods like clothes will decrease. B. The demand for goods like clothes will increase. C. The supply of goods like clothes will increase. D. The demand for goods like clothes will decrease.
Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired produces four units of output per hour, then to maximize profits the firm should
A) hire another worker. B) not change the number of workers it currently hires. C) lay off some workers. D) There is not enough information to answer the question.
If full employment GDP is $1 trillion greater than the equilibrium GDP and the multiplier is 5, how much is the deflationary gap?
What will be an ideal response?