Which of the following is/are true?

I.In the long run (LR) that we study in Ch. 3, we treat physical capital stock, labour stock and production efficiency stock as fixed and pre-determined by history.

II.In the long run (LR) that we study in Ch. 3, we treatthe usage of factors of production as fixed at their "normal" usage.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

Which of the following is/are true in the classical model of the LR closed economy?

I.When taxes increase, budget deficit will decrease.

II.When taxes increase, public savings will be less.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

Which of the following is/are true?

I.In accordance with the consumption function, consumption spending is inversely related to real disposable income.

II.In the classical model of the long-run closed economy, an increase in real interest rate does not shift the investment schedule in the loanable funds market.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.