MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Chapter 19, Problem 8PA
To determine
The impact of tax on investment.
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inflationary increase in price level
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change in government policy to decrease in
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short-run decrease in cyclical unemployment
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MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
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- In the Neoclassical Model, which of the following is more likely to be associated with a high level of unemployment? A) A low money wage. B) A low real wage. C) A high rate of interest. D) A high rate of inflation. E) None of the above.arrow_forwardUse the neoclassical theory to predict the impact on i) the real wage and ii) the real rental priceof capital of each of the following events:a) A wave of immigration increases the labor force.b) An earthquake destroys some of the capital stock.c) A technological advance improves the efficiency of production.arrow_forwardThe neoclassical model of marriage focuses on productivity. This model says that there are gains from marriage that results from gains from trade (sharing production, specializing, etc.) List three OTHER gains from marriage (that are NOT associated with productivity advantages).arrow_forward
- According to neoclassical theory, compensating consumers for inflation as measured by a base year weighted index can overcompensate them because: A some goods may be inferior B relative prices may not have changed C some goods may give disutility D goods are substitutable in consumer preferencesarrow_forwardUsing the Neoclassical model of Investment, mathematical equations and graphs, explain the real cost to rental firms of owning capital.arrow_forwardWith the use of the neoclassical model of investment, explain what would happen to the rental price of capital, the cost of capital, and investment if a hurricane destroys some portion of the capital stock.arrow_forward
- Which one of the following is the best example of someone acting according to the assumptions of the traditional neoclassical model? -Dori studies hard for her test so she can eventually land a great job. -Alenia buys groceries for her sick neighbor out of kindness. -Marc buys a pack of cigarettes out of habit. -Chip buys an exercise machine based on a TV ad, even though research has shown that the machine is ineffective.arrow_forwardBriefly discuss the aggregate supply curve in the neoclassical model, including how the curve is drawn, what it determines, and how it operates over timearrow_forwardFrom a neoclassical view, which of the following is less important? fighting unemployment encouraging long-term growth encouraging more productivity per worker level of potential GDParrow_forward
- In the neoclassical Supply and Demand model, what is meant by shortage? Group of answer choices Making a bet that the value of a stock will go down. At the existing price, the quantity demanded exceeds the quantity supplied. At the existing price, quantity supplied exceeds the quantity demanded. A decrease in quantity demanded.arrow_forwardConsider the following production function: Y; = AKEH?-"L || where Kris capital, Ht is human capital, Leis the amount of workers and A is the (constant) level of technology. (i) Does this production function satisfy all the neoclassical properties. Discuss the meaning of each property INTUITIVELY.arrow_forwardDerive the investment function (using the neoclassical model of investment). Explain how investment responds to changes in Marginal Product of Capital and interest rate.arrow_forward
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