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  • Suppose the economy's production function is Y = AK 0.3 N 0.7. When K = 1000, N = 50, and A= 15, what is Y? #171
  • Suppose that Freedonia has GDP equal to 2000 million, the capital stock is 1700 million, and the number of employees equals 70 million. The production function is Y = AK 0.25 N0. 75 Total factor productivity of the economy is approximately equal to #172
  • The two main characteristics of the production function are #173
  • Desired national saving equals #174
  • The distinction between saving and savings is that saving is …, while savings is …. #175
  • With no inflation and a nominal interest rate (i) of.03, a person can trade off one unit of current consumption for … units of future consumption. #176
  • The desire to have a relatively even pattern of consumption over time is known as #177
  • An expensive and unexpected car repair causes Cathy to reduce her spending this year by $1000 and next year by $1000, as well. She spreads the cost of the repair over time because of #178
  • The government a new source of revenue from its ownership of natural resources that is likely to be permanent. As a result, the government surprises everyone by cutting taxes. In response, Jeff increases his spending this year by $1000 and next year by $1000, as well. He spreads his increased spending over time because of #179
  • When a person gets an increase in current income, what is likely to happen to consumption and saving? #180
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