Suppose that the production function is Y = AK0.35L0.65, the number of workers equals 800, the capital stock is $150,000, and real GDP is $750,000. What is the value of total factor productivity?

A principle difference between the new Classical and the new Keynesian models has to do with the choices made by business firms. We find that

A) new classical business firms choose the output level given the price level, while new Keynesian firms choose the price level given the level of output. B) new classical business firms choose the price level given the output level, while new Keynesian firms choose the output level given the level of output. C) both new classical and new Keynesian firms select the price level, but only new classical firms select the output level. D) both new classical and new Keynesian firms select the output level, but only Keynesian firms select the price level.

Which of the following changes is most likely to happen when there is a decrease in the supply of money in a market that was initially in equilibrium?

a. The demand for money increases b. Planned investment spending increases c. Interest rate increases d. Aggregate expenditure increases e. The demand for money decreases