Econ 2030

Which of the following will reduce consumer expenditures, C?

a decrease in expected future income or a decrease in the price level

Which of the following will increase consumer expenditures, C?

a decrease in interest rates

If last year inventories remained unchanged, this implies

aggregate expenditure, AE, that year was equal to GDP, Y, that year

If last year inventories decreased by $500,000, this implies

aggregate expenditure, AE, that year was greater than GDP, Y, that year

If last year inventories grew by $500,000, this implies

aggregate expenditure, AE, that year was lower than GDP, Y, that year

Which of the following is an example of human capital?

A collage Education

If the U.S. dollar appreciates (gets stronger) against the Canadian dollar from 1.38 Ca $/U.S. $ to 30) 1.50 Ca $/U.S. $, net exports in the U.S. will

Decrease

If the U.S. dollar depreciates (gets weaker) against the Canadian dollar from 1.38 Ca $/U.S. $ to 1.20 17) Ca $/U.S. $, net exports in the U.S. will

Increase

Which of the following would be the best measure of the cost of living?

The CPI

If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years, then

investment spending will fall

If firms are more optimistic and believe that future profits will rise and remain strong for the next few years, then

investment spending will rise

If Ebenezer Scrooge spends rather than saves his vast wealth he will

slow economic growth because he is reducing the amount of funds available for investment.

What two factors are the keys to determining labor productivity?

technology and the quantity of capital per hour worked.

The theory of "global convergence" predicts that

the level of real GDP per capita in poor countries should grow faster than in rich countries