The Solow residual helps explain growth that derives from
a. increasing the size of the labor force.
b. increasing the size of the capital stock.
c. increasing the capital-labor ratio.
d. anything except increases in the size of the labor force or the capital stock.
D
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Ali's Gyros operates near a college campus. Ali has been selling 120 gyros a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 200 gyros per day at $3.50 each
a. Calculate the price elasticity of demand using the midpoint formula. b. Calculate the change in revenue as a result of the price cut.
In a Keynesian model, a temporary increase in government purchases would cause output to ________ and the domestic real interest rate to ________, in the short run
A) remain unchanged; increase B) remain unchanged; decrease C) increase; increase D) increase; decrease