Econ ch25-28 T/F
Most economists believe that inward-oriented policies that protect infant industries improve the growth rates of developing nations.
False
Paying efficiency wages tends to increase worker turnover because workers can get continually higher wages if they "job hop".
False
People who buy stock in a firm have loaned money to the firm.
False
The United States should grow faster than Japan because the United States has a larger economy.
False
The financial crisis of 2008 and 2009 began with a sharp economic downturn and a reduction in the overall demand for output
False
The presence of unemployment insurance tends to decrease the unemployment rate because recipients of unemployment benefits are not counted in the labor force.
False
The unemployment rate is about the same for the various demographic groups: men, women, black, white, young, old.
False
When a business firm sells a bond, it has engaged in equity finance.
False
Whenever the wage rises above the competitive equilibrium, regardless of the source, the result is additional unemployment.
True
If the unemployment rate falls, we can be certain that more workers have jobs
False
If wages were always at the competitive equilibrium, there would be absolutely no unemployment.
False
The opportunity cost of additional growth is that someone must forgo current consumption.
True
The presence of a union tends to raise the wage for insiders and lower the wage for outsiders.
True
The quantity supplied of loanable funds is greater if real interest rates are higher
True
The rate of economic growth is probably underestimated.
True
If you save money this week and lend it to your roommate to buy food for consumption, your act of personal saving has increased national saving.
False
A country can only increase its level of investment by increasing its saving.
False
A minimum wage is likely to have a greater impact on the market for skilled workers than on the market for unskilled workers.
False
An efficiency wage is like a minimum wage in that firms are required by legislation to pay it.
False
An increase in the budget deficit that causes the government to increase its borrowing shifts the demand for loanable funds to the right.
False
An increase in the rate of saving and investment permanently increases a country's rate of growth.
False
Due to the existence of "discouraged workers," the official unemployment rate may overstate true unemployment.
False
Economic evidence supports the predictions of Thomas Malthus regarding the effects of population growth and the food supply on the standard of living.
False
Evidence of rising prices for natural resources demonstrates that non-renewable resources will become so scarce that economic growth will be limited.
False
Human capital refers to human-made capital such as tools and machinery, as opposed to natural capital such as rivers and timber.
False
If the government wanted to increase the rate of growth, it should raise taxes on interest and dividends to shift the supply of loanable funds to the right.
False
If the real interest rate in the loanable-funds market is temporarily held above the equilibrium rate, desired borrowing will exceed desired lending and the real interest rate will fall.
False
A reduction in the budget deficit should shift the supply of loanable funds to the right, lower the real interest rate, and increase the quantity demanded of loanable funds.
True
A union is a labor cartel.
True
Advocates of unions argue that unions may increase efficiency in some circumstances because they decrease the cost of bargaining between labor and management.
True
An increase in capital should cause the growth rate of a relatively poor country to increase more than that of a rich country.
True
Firms may voluntarily pay wages above the level that balances the supply and demand for workers because the higher wage improves the average quality of workers that apply for employment.
True
If Germans invest in the UK economy by building a new Volkswagen factory, in the future UK GDP will rise by more than UK GNP.
True
If a production function exhibits constant returns to scale, then doubling all of the inputs doubles output.
True
In a closed economy, investment is always equal t saving regardless of where the saving came from -- public or private sources.
True
In a closed economy, saving is what remains after consumption expenditures and government purchases.
True
In post-World War II United States, the labor-force participation rate has been rising for women and has been falling for men.
True
In very poor countries, paying parents to send their children to school may increase the education of poor children and decrease the use of child labour.
True
Investment in human capital and technology may be particularly productive because of positive spillover effects.
True
Investment is the purchase of capital equipment and structures.
True
Municipal bonds pay less interest than comparable risk corporate bons because the interest payments are tax exempt to the bondholder.
True
Mutual funds reduce a shareholder's risk by purchasing a diversified portfolio.
True
Public saving and the government's budget surplus are the same thing.
True
The natural rate of unemployment is the amount of unemployment that won't go away on its own, even in the long run.
True
The only factor of production that is not "produced" is natural resources.
True
