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