Problem 1: What is the growth rate of multifactor productivity if b = 0.20, k = 3, n = 1, and y = 4
a) 2.4
b) 0.4
c) 2.8
d) 1.0
Problem 2: Which of the following beliefs is not part of supply-side economics?
a) A sharp reduction in corporate income taxes would discourage U.S. corporations from shifting their production facilities to other countries, thus leading to a decrease in the unemployment rate
b) A sharp reduction in personal income taxes would bring forth a higher capital stock through greater savings and investment
c) A sharp reduction in personal income taxes would bring forth higher-labor-force participation.
d) A reduction in tax rates would lead to increased output and actually allow tax revenues to rise.