Active stabilization policy can be rationalized in the New Keynesian model because
A) it makes it possible to obtain zero inflation.
B) the government knows best.
C) it counteracts the influence of unions.
D) it allows a faster return to economic efficiency.
Question 2
In the steady state of Solow's exogenous growth model, an increase in the growth rate of labor force
A) increases output per worker and increases capital per worker.
B) increases output per worker and decreases capital per worker.
C) decreases output per worker and increases capital per worker.
D) decreases output per worker and decreases capital per worker.
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