In the long run, we typically assume that ________
A) capital, labor, and technology are independent of the level of inflation
B) the natural rate of unemployment is independent of the level of inflation
C) aggregate supply is fixed and independent of the level of inflation
D) all of the above
E) none of the above
D
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Explain how each of the following events would affect the supply of loanable funds curve:
a. The economy is in a recession so people's disposable income is lower. b. The stock market is booming so people's wealth is higher. c. The future looks a bit more grim, so expected future income is lower. d. The real interest rate increases.
Labor productivity in the United States was 5.4 times higher in the United States than in China in 2010. A key reason that labor productivity is higher in the United States is because the United States
A) has a higher growth rate, based on GDP per capita, than China. B) has a higher life expectancy and higher birth rate than China. C) devotes more resources than China to developing new technology and accumulating human capital. D) devotes more resources than China to developing export markets to boost its real GDP and income.