12 If the current real interest rate increases and the substitution effect dominates, then the current labor supply ()
15 The following statement about the current labor demand of the enterprise is correct ()
A Total factor productivity decreases, and the labor demand curve moves to the right
B The current capital increases and the current labor demand curve shifts to the left
C enterprises receive government subsidies, the current labor demand curve shifts to the right
D The government raises income tax, and the labor demand curve shifts to the left
16 The current optimal investment law of an enterprise is ()
A MPK-d = r
B MPK'-d = r
C MPK + d = r
D MPK '+ d = r
12. If the current real interest increases, and the substitution effect dominates, then the current labor supply will increase. Here, only option A is correct. (Other options are incorrect as the result do not follow).
15. With increase in total productivity, demand for labor curve must shift to the right (Option A is incorrect)
With increase in capital, demand for labor curve must shift to the right (Option B is incorrect)
With subsidy given to the firms, demand for labor curve must shift to the right (Option C is correct)
Whereas, increase in income taxes shifts labor supply curve to the left. (Option D is incorrect)
Thus, only option C is correct.
16. Investment is held by MPK' = r+d (where r is the rate of interest and d is the depreciation) . With rise in r, investment falls. Here, only option B is correct.
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