Given the information in Scenario 14.1, how much labor will be hired to maximize profit?

An employee who has worked with only one organization all her life, and is now close to her retirement age, is unlikely to find an equally profitable position with another company because:

a. her productivity is very low. b. her firm-specific capital is of little use to other organizations. c. other organizations can not verify her previous work record. d. her preference for leisure is likely to be very high.

Which of the following will increase the demand for loanable funds?

a. a newly established consumption tax b. a decrease in the real interest rate c. an increase in the real interest rate d. creation of an investment tax credit for businesses