Real business cycle theories suggest that _____ to correct departures from the desired growth path?

A. There is a role for fiscal policy
B. There is a role for monetary policy
C. There is a role for supply-side policy
D. There is a role for stabilizing output ever the business cycle

An increase in the wage rate ?

A. Will usually lead to more people employed
B. Will decrease total earning if the demand for labour is wage elastic
C. Is illegal in a free market
D. Will cause a shift in the demand for labour

A fall in demand for labour is likely to lead to ?

A. A lower equilibrium wage and lower quantity of labour
B. A lower equilibrium wage and higher quantity of labour
C. A higher equilibrium wage and higher quantity of labour
D. A higher equilibrium wage and lower quantity of labour

The Marginal Revenue Product is ?

A. Upward sloping due to the law of demand
B. Upward sloping due to the law of marginal utility
C. Downward sloping due to the law of diminishing returns
D. Downward sloping due to the law of supply

Governments can stimulate productivity by ?

A. Imposing higher taxes on capital
B. Encouraging more labour intensive work to reduce unemployment
C. Reducing spending in education
D. Encouraging private investment

GDP per head may be an imperfect measure of economic welfare because it excludes ?

A. the value of leisure
B. externalities
C. untraded goods
D. change in the distribution of income

The neoclassical theory of growth identifier the steady state rate of growth as the ____ just sufficient to keep _____ constant while labor grows?

A. Saving, investment
B. Capital per person, productivity
C. Labor growth, output
D. Investment capital per person

The business cycle describes fluctuations in output around the?

A. Trend path of output
B. Boom
C. Recession
D. Short-run fluctuations in output

The best way to achieve economic growth is to ?

A. Increase government spending
B. Reduce taxation
C. Save more
D. Increase personal consumption

The long run equilibrium level of national income is the level at which ?

A. Economic growth is zero
B. All investment is used in the manufacturing sector
C. Economic growth is growing
D. All investment is used to maintain the existing capital stock at its current level