What role do households play in the market for inputs? What role do firms play?
What will be an ideal response?
In the market for inputs, households are the suppliers. They sell their labor services in the labor market to firms who demand labor to produce their products. Owners of land sell or rent their land to firms for production purposes. Households supply their savings to financial markets so that firms are able to buy capital.
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The population growth rate tends to be higher in developed countries than in developing countries
a. True b. False Indicate whether the statement is true or false
Consider a large open economy that has a zero current account balance. What are the effects on the world real interest rate, national saving, investment, and the current account balance in equilibrium if(a)future income rises?(b)business taxes decline?(c)government purchases decline?(d)the future marginal product of capital declines?
What will be an ideal response?