During business contractions, the growth rate of Solow residuals is ________
A) near or below zero
B) well above zero
C) approaching infinity
D) impossible to calculate
A
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With respect to the Keynesian liquidity trap, at very low levels of income, equilibrium in the money market occurs at points along the flat portion of the money demand schedule where
a. the elasticity of money demand is extremely high. b. money demand is associated with a low interest elasticity. c. money demand is completely interest inelastic. d. None of the above
Which of the following statements about economic methodology is correct?
a. An economic law is a cause-and-effect relationship that has been verified by a controlled experiment. b. The test of a theory's validity is its usefulness in explaining reality. c. An economic law is a statement about group behavior that is based on the observed behavior of a single individual. d. An economic law, because it is based on probabilities, can only be expected to be true about half the time. e. Assumptions are ignored in the development of hypotheses.