12. Suppose individuals now believe that there will be a future tax cut. This reduction in expected future taxes will cause which of the following to occur in the current period? a. the LM curve to shift down. b. the LM curve to shift up. c. the IS curve to shift rightward. d. the IS curve to shift leftward. e. none of the above.
13. Which of the following statements is true?
14. In the absence of technological progress, which of the following remains constant in the steady state equilibrium?
15. When steady state capital per worker is above the golden-rule level, we know with certainty that an increase in the saving rate will
16. In an economy with technological progress, which of the following is always true after an economy reaches a balanced growth equilibrium? a. the growth rate of output equals the rate of depreciation. b. population growth is zero. c. the growth rate of capital is equal to the growth rate of the effective work force. d. the growth rate of capital is equal to the savings rate. e. none of the above.