Exam 3: National Income Where It Comes From and Where It Goes

In the classical model, what adjusts to eliminate any unemployment of labor in the economy?

Assume that the consumption function is given by C = 200 + 0.7(Y - T), the tax function is given by T = 100 + t Y, and 1 Y = 50K^0.5L^0.5, where K = 100 and L = 100. If t increases from 0.2 to 0.25, then consumption decreases by: 1

If the consumption function is given by C = 150 + 0.85Y and Y increases by 1 unit, then savings:

A consumption function shows the relationship between consumption and:

National saving is:

Consumption depends positively on and investment depends negatively on .

If the consumption function is given by C = 150 + 0.85(Y - T) and T increases by 1 unit, then savings:

In the circular flow diagram, firms receive revenue from the market, which is used to purchase inputs in the market.

The price received by each factor of production for its services is determined by:

In a Cobb-Douglas production function the marginal product of capital will increase if:

In a Cobb-Douglas production function the marginal product of labor will increase if:

The equation may be solved for the equilibrium level of:

In the classical model with fixed income, if the interest rate is too low, then investment is too and the demand for output the supply.

The neoclassical theory of distribution explains the allocation of:

If the consumption function is given by C = 150 + 0.85Y and Y increases by 1 unit, then C increases by:

When economists speak of "the" interest rate, they mean:

The two most important factors of production are:

A competitive, profit-maximizing firm hires labor until the:

Since 1960, the U.S. ratio of labor income to total income has:

Public saving is: