Technological innovation is not subject to diminishing marginal returns because:
a. it can be used by workers across the economy at a low marginal cost
b. it can result in a rightward shift of the aggregate production function of an economy.
c. it can result in a rightward shift of the production possibilities frontier of an economy.
d. it can be used by skilled as well as unskilled workers across the economy.
a
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Refer to Figure 4.3. All else equal, an increase in the government's budget deficit accompanied by a decrease in corporate taxes would cause which of the following shifts?
A) S1 to S2 and D1 to D2 B) S2 to S1 and D1 to D2 C) S1 to S2 and D2 to D1 D) S2 to S1 and D2 to D1
Whatever specific form it takes, the excise tax is regressive
Indicate whether the statement is true or false
Investment is a
a. small part of real GDP, so it accounts for a small share of the fluctuation in real GDP. b. small part of real GDP, yet it accounts for a large share of the fluctuation in real GDP. c. large part of real GDP, so it accounts for a large share of the fluctuation in real GDP. d. large part of real GDP, yet it accounts for a small share of the fluctuation in real GDP.
Most trade agreements contain countries in the same area of the world. Why is this so?
A) The distances that goods need to travel between such countries are short. B) Distribution channels are not easily established in adjacent countries. C) Adjacent countries are reluctant to coordinate policies. D) Neighboring countries usually lack a common history and interests