In the neoclassical growth model, the rate of technological process is:
a. 2 percent.
b. 0 percent.
c. exogenous and not explained.
d. endogenous and explained by human capital accumulation.
C
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is
A) $60. B) $405. C) $0. D) $210,000. E) unknown because more information is needed to determine Paul's profit.
Economists define risk as
A) the difference between the interest rate borrowers pay and the interest rate lenders receive. B) the chance that the value of financial assets will change from what you expect. C) the ease with which an asset can be exchanged for other assets or for goods and services. D) the difference between the return on common stock and the return on corporate bonds.
A horizontal LM curve implies that the expenditure multiplier, when compared with the simple Keynesian expenditure multiplier, is
A) smaller. B) larger. C) equal. D) equal to the inverse of the simple multiplier.
In a market economy, supply and demand are important because they
a. are direct policy tools used by government agencies to regulate the economy. b. illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium. c. can be used to predict the impact on the economy of various events and policies. d. All of the above are correct.