Which of the following most accurately describes the aggregate supply curve?
a. It shows the price level associated with firms' unit costs and markups for any level of GDP.
b. It is the sum of all individual firms' supply curves.
c. It is determined by the federal government.
d. It shows firms' unit costs for each level of GDP.
e. It shows the equilibrium level of GDP corresponding to each price level.
A
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In the endogenous growth model presented in the text, suppose that u represents the fraction of time spent working (as opposed to accumulating human capital) and b represents the efficiency of human capital accumulation
The growth rate of human capital equals A) u(1 - b) - 1. B) 1 + b(1 - u). C) (1 + b)(1 - u). D) b(1 - u) - 1.
Based on our understanding of consumption and saving, we know that the marginal propensity to consume and the marginal propensity to save must
A) be equal to each other. B) sum to exactly one. C) sum to less than one. D) sum to more than one. E) be equal to the multiplier.