macro economics test 3

credit risk refers to a bond's

probability of default

an increase in the budget deficit will

raise the real interest rate and decrease the quantity of loanable funds demanded for investment

a reasonable measure of the standard of living in a country is

real GDP per person

if americas become less concerned with the future and save each real investment rate,

real interest rates rise, and investment falls

which of the following expenditures to enhance productivity is most likely to emit a positive externality

susan paying her college tuition

if the government increases investment tax credits and reduces taxes on the return to saving at the same time

the impact on the real interest rate is indeterminate

Investment is

the purchase of capital equipment and structures

If Americas become more thrifty, we would expect

the supply of loanable funds to shift to the right and the real interest rate to fall

if government spending exceeds tax collections

there is a budget deficit

Many east asian countries are growing very quickly because

they save and invest an unusually high percentage of their GDP

which of the following is an example of foreign portfolio investment

toyota buys stock in ford and ford uses the proceeds to build a new plant in michigan

Madelyn goes to college and reads many books while at school. Her education increases which of the following factors of production

human capital

If mazda builds a new plant in illinois

in the future, US GDP will rise more than US GNP

which of the following government policies is least likely to increase growth in Africa?

increase restrictions on the importing of Japanese automobiles and electronics

when a nation has very little GDP per person

it has the potential to grow quickly because of the "catch-up effect"

once a country is wealthy

it may be harder for it to grow quickly because of the diminishing returns to capital

for a given level of technology, we should expect an increase in labor productivity within a nation when there is an increase in each of the following except

labor

which of the following sets of government policies is the most growth oriented

lower taxes on the returns to saving, provide investment tax credits, and lower the deficit

which of the following statements is true

municipal bonds pay less interest than comparable corporate bonds

to increase growth, governments should do all the following except

nationalize major industries

our standard of living is most closely related to

our productivity because our income is equal to what we produce

If GDP = $1,000, consumption = $600, taxes =$100, and government purchases = $200, how much is saving and investment

saving = $200, investment = $200

If the public consumes $100 billion less and the government purchases $100 billion more (other things unchanging), which of the following statements is true?

saving is unchanged

an increase in the budget deficit that causes the government to increase its borrowing

shifts the supply of loanable funds to the left

an increase in the budget surplus

shifts the supply of loanable funds to the right and reduces the real interest rate

which of the following is an example of equity finance

stock

which of the following statements regarding the impact of population growth on productivity is true?

(All the Above) There is no evidence yet that rapid population growth stretches natural resources to the point that it limits growth in productivity; rapid population growth may dilute the capital stock, lowering productivity; rapid population growth may promote technological progress, increasing productivity

If real GDP per person in 2009 was 18,073 and real GDP in 2010 was 18635 what is the growth rate of real output over this period?

3.1%

national savings (or just saving) is equal to

Private saving+ public saving

which of the following financial market securities would likely pay the highest interest rate

a bond issued by a start-up company

an increase in the budget deficit is

a decrease in public saving

which of the following describes an increase in technological knowledge

a farmer discovers that it is better to plant in spring rather than in fall

Copper is an example of

a nonrenewable natural source

if the supply of loanable funds is very inelastic (steep), which policy would likely increase saving and investment the most

a reduction in the budget deficit

thomas malthus argued that

an ever- increasing population is constrained only by the food supply, resulting in chronic famines

a financial intermediary is a middle person between

borrowers and lenders

which of the following statements is true

countries have great variance in both the level and growth rate of GDP per person; thus poor countries can become relatively rich over time

if an increase in the budget deficit reduces national saving and investment, we have witnessed a demonstration of

crowding out

the opportunity cost of growth is a reduction in

current consumption

if a production function exhibits constant returns to scale, doubling all of the inputs

doubles output