Let the production function be q=ALaKb. The function exhibits increasing returns to scale if
A) a + b = 1.
B) a + b > 1.
C) a + b < 1.
D) Cannot be determined with the information given.
B
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If society wants aggregate demand to increase without changes in the price level, then there must be
A) an increase in autonomous spending combined with an increase in the marginal propensity to save. B) a gap between full employment and the current level of real GDP and an increase in autonomous spending. C) an increase in autonomous saving so that autonomous investment spending can increase. D) an increase in autonomous spending and a horizontal short-run aggregate supply curve.
Suppose 180,000 people are employed, 20,000 people are unemployed, the working-age population is 250,000, and 50,000 people are not in the labor force. Calculate the unemployment rate
What will be an ideal response?