In the ISmodel, assuming that the real interest rate does notchange, an increase in________ leads to an increase in equilibrium saving by households.

A.

autonomous net exports

B.

government purchases

C.

autonomous investment

D.

all of the above

E.

none of the above

If planned expenditure is belowoutput, as the economy approachesequilibrium, ________.

A.

saving is rising

B.

planned expenditure is rising

C.

output is rising

D.

all of the above

E.

none of the above

If the contribution from capital growth equals 2 percent and the contribution from labor growth equals 4percent, then GDP________.

A.

will grow by 6 percent.

B.

will grow by 2 percent.

C.

will grow by 8 percent.

D.

will change by an unknown percentage.

On the SolowDiagram, an increase in productivity is shown by

A.

an upward shift of the depreciation plus capital dilution line

B.

a downward shift of the investment function

C.

an upward shift of the investment function

D.

a downward shift of the depreciation plus capital dilution line

Output per worker is50, the saving rate is 15percent, the population is growing at onepercent, depreciation is 9percent, and the capitallabor ratio is 80. Consumption per worker is________.

A.

falling

B.

68

C.

37.5

D.

75