Suppose a country's labor supply increases in a year while its capital stock remains constant. Which of the following is likely to happen in this case if output is a function of capital and total efficiency units of labor?
A) Its total output will increase. B) Its total output will decrease.
C) Its output per capita will decrease. D) Its total output will remain constant.
A
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Which of the following variables is the key determinant in deciding whether goods are to be bought domestically or imported?
A) The real exchange rate B) The domestic interest rate C) The nominal exchange rate D) The foreign interest rate
In the figure above, the SLF curve is the supply of loanable funds curve and the PSLF curve is the private supply of loanable funds curve
Given these curves, there is a government budget ________ and therefore the real interest rate is ________ than it would be otherwise. A) deficit; lower B) surplus; lower C) deficit; higher D) surplus; higher E) deficit; not different