Question 7 If the elasticities of output with respect to capital and labor add up to 1, and both capital and labor are increased simultaneously by 5%, output will rise by a) less than 5% b) more than 5% c) 5% exactly d) none above Question 8 Consider Y=C+1 (r)+ G, where r is the real interest rate. With Y given, following a decrease in G. in equilibrium a) I decreases b) I increases

Question 7 If the elasticities of output with respect to capital and labor add up to 1, and both capital and labor are increased simultaneously by 5%, output will rise by a) less than 5% b) more than 5% c) 5% exactly d) none above Question 8 Consider Y=C+1 (r)+ G, where r is the real interest rate. With Y given, following a decrease in G. in equilibrium a) I decreases b) I increases

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What are the final answers to each part.