The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis (assuming diminishing returns)
a. is positive and gets steeper as capital per worker rises.
b. is positive and gets flatter as capital per worker rises.
c. is negative and gets steeper as capital per worker rises.
d. is negative and gets flatter as capital per worker rises.
Suppose that the tires of a certain tire manufacturer are discovered to be defective. Other things the same, this news would cause
a. the demand for this company's stock to decrease, so the price would rise.
b. the demand for this company's stock to decrease, so the price would fall.
c. the supply of this company's stock to decrease, so the price would fall.
d. the supply of this company's stock to decrease, so the price would rise.
In a small closed economy investment is $50 billion and private saving is $55 billion. What are public saving and national saving?
a. $60 billion and $5 billion
b. $50 billion and -$5 billion
c. $5 billion and $60 billion
d. -$5 billion and $50 billion
If there is a surplus of loanable funds, then
a. the quantity demanded is greater than the quantity supplied and the interest rate will rise.
b. the quantity demanded is greater than the quantity supplied and the interest rate will fall.
c. the quantity supplied is greater than the quantity demanded and the interest rate will rise.
d. the quantity supplied is greater than the quantity demanded and the interest rate will fall.
What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?
a. The supply of loanable funds would shift rightward and investment would increase.
b. The supply of loanable funds would shift leftward and investment would decrease.
c. The demand for loanable funds would shift rightward and investment would increase.
d. The demand for loanable funds would shift leftward and investment would decrease.
Suppose the U.S. offered a tax credit for firms that built new factories in the U.S.. Then
a. the demand for loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.
b. the demand for loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.
c. the supply of loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.
d. the supply of loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.