Increase wage rates because labor becomes more productive

increase the rate of return on capital because capital becomes more productive

increase the marginal product of capital

reduce the capital-output ratio

A central bank purchases $1 million of govern­ment securities in a given week. If other things remain the same, total bank reserves will not increase if which of the following increases by $1 million?

(A) Gold in the hands of the central bank

(B) Borrowing by private banks

(C) Central-bank float

(D) Excess reserves

(E) Currency in the hands of the nonbank public

Assume the simple three-equation macroeconomic model given by

C_t = a₀ + a₁ Y_t-1

I_t = b₁(Y_t - Y_t-1)

Y_t = C_t + I_t + G_t

where C_t is current consumption

I_t is current investment

G_t is current government spending

And Y_t is current income

The best measure of the short-run effect on Y_t of a change ΔG is

(A) (B) (C) (D) (E)

Which of the following is not an automatic fiscal stabiliser?

(A) Corporation taxes

(B) Value added tax

(C) State retirement pension

(D) Unemployment benefit

(E) Food stamps

(повтор c 46) Other things being equal, what will cause a reduction in the stock of money?

(A) A balance of payments surplus

(B) An increase in the public’s demand for bank advances

(C) An increase in the public’s desired ratio of cash to bank deposits

(D) An increase in the public sector borrowing requirement

(E) All of the above

In the diagram, AD₁ and AS₁ are an economy’s initial aggregate demand and supply curves.

What will cause the aggregate demand curve to shift to AD₂?

(A) An appreciation of the national currency

(B) A decrease in taxes

(C) A decrease in interest rates

(D) A decrease in the price level

(E) None of the above

Which of the following best explains the classical economists’ conclusion that sustained involuntary unemployment in an economy cannot persist?

Full employment is guaranteed by government.

People will always want to work if there is no welfare system.

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