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 O 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 Ob) | increases cl r decreases O d) Band C