The marginal rate of technical substitution of labor for capital (MRTSLK) measures
a. the amount of capital that can replace a unit of labor without affecting the firm's output.
b. the additional output attributable to a 1% increase in labor and capital usage.
c. the rate at which the firm can exchange labor for capital in the input markets.
d. the slope of the firm's expansion path.
a. the amount of capital that can replace a unit of labor without affecting the firm's output.
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An increase in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run?
A) The price level will rise, and the level of GDP will fall. B) The price level will rise, and the level of GDP will be unaffected. C) The price level will fall, and the level of GDP will fall. D) The price level will fall, and the level of GDP will rise.
Where Y is GDP, C is consumption, I is investment, G is government purchases, T is net taxes, and there is no international trade, the government budget deficit equals:
A. Y + T - G. B. T - G. C. Y - G. D. G - T.