All else equal, continued increases in the labor supply in an economy will lead to
A) continued increases in the capital stock.
B) higher levels of total factor productivity.
C) smaller increases in real GDP.
D) an increase in labor's share of income.
C
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Suppose that a market for a product is in equilibrium at a price of $3 per unit. At any price below $3 per unit
A) there will be an excess demand for the product. B) the quantity demanded of the product will be less than the quantity supplied of that product. C) there will be a surplus of that product. D) there will be an excess supply of the product.
Assume the exchange rate is allowed to fluctuate freely. Using the IS-LM-IP model, graphically illustrate and explain what effect a reduction in government spending will have on the domestic economy. In your graphs, clearly label all curves and equilibria
What will be an ideal response?