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In the Solow growth model of Chapter 8, investment equals: A) saving

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In the Solow growth model of Chapter 8, investment equals: A) saving. B) output. C) consumption D) the marginal product of capital. 74. If the capital stock equals 200 units in year 1 and the depreciation rate is 5 percent per year, then in year 2, assuming no new or replacement investment, the capital stock would equal units. A) 190 B) 210 C) 200 D) 195 75. An explanation for the slope of the LM curve is that as: A) the interest rate increases, income becomes lower. B) income rises, money demand rises, and a lower interest rate is required. C) the interest rate increases, income becomes higher. D) income rises, money demand rises, and a higher interest rate is required. 76. An LM curve shows combinations of: A) interest rates and income, which bring equilibrium in the market for real money balances. B) interest rates and income, which bring equilibrium in the market for goods and services. C) nominal money balances and price levels. D) taxes and government spending. 77. Other things equal, a given change in money supply has a larger effect on demand the: A) smaller the income sensitivity of money demand. B) flatter the LM curve. C) steeper the IS curve. D) larger the income sensitivity of money demand. 78. In the IS-LM model, a decrease in the interest rate would be the result of a(n): A) increase in money demand. B) decrease in taxes. C) increase in the money supply. D) increase in government purchases.