Suppose that a lawn mowing services production function for lawns mowed in a week is M = (LK)1/2, where L is labor hours and K is the amount of capital (mowers and trimmers). The expansion path depends on

Often, the farther real GDP is below potential GDP,

A) the smaller the multiplier effect. B) the larger the multiplier effect. C) the less effective is the multiplier effect. D) the less meaningful is the multiplier effect.

The economic problem with Medicare financing is that

A) there is a built-in incentive to provide fewer services by doctors. B) there is a built-in incentive to travel to Canada to receive medical services. C) the cost of providing services is falling annually. D) there is a built-in incentive to consume more services.