Principles of Macroeconomics - Ch. 12-15
The opportunity cost of growth is
a reduction in current consumption
Once a country is wealthy,
it may be harder for it to grow quickly because of the diminishing returns to capital
In February 2015 the Bureau of Labor Statistics reported an adult population of 250 million, unemployment of 10.4 million, employment of 142.8 million, and .8 million marginally attached workers. Based on these numbers the labor force participation rate was
100 x 153.2/250.
Which of the following is consistent with the efficient market hypothesis?
Stock prices follow a random walk.the efficient markets hypothesis is the theory that asset prices reflect all publicly available information about the value of an asset. The theory implies that stock prices should follow a random walk. That is, changes in stock prices are impossible to predict from available information. If based on publicly available information, you could predict that a stock price would rise by 10% tomorrow, then the stock market must be failing to incorporate that information today. The only thing that can move stock prices is an unexpected news that changes the market's perception of the company's value.
In Japan, real GDP per person was $1,667 in 1890 and $43,279 in 2017. The growth rate was 2.60% per year. Which of the following is true?
The growth rate of 2.60% per year ignores short-run fluctuations around the long-run trend.
Which of the following correctly describes how corporations raise funds for new investments?
The sale of stock to raise money is called equity finance, whereas the sale of bonds is called debt finance.
Thomas Malthus agreed that
an ever-increasing population is constrained only by the food supply, resulting in chronic famines
foreign portfolio investment
an investment that is financed with foreign money but operated by domestic residents; ex: Toyota buys stock in Ford, and Ford uses the proceeds to build a new plant in Michigan.
If a production function exhibits constant returns to scale,
doubling all of the inputs doubles output
to increase growth, governments should do all of the following
encourage saving and investment; promote free trade; encourage research and development; encourage foreigners to invest in your country
If Mazda builds a new plant in Illinois,
in the future, U.S. GDP will rise more than U.S. GNP.
When a nation has very little income per person,
it has the potential to grow relatively quickly due to the "catch-up effect"
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
to increase growth, governments should do all of 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
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
physical capital per worker; natural resources per worker; human capital per worker
a reasonable measure of the standard of living in a country is
real income per person
Suppose that autoworkers are unionized. If autoworkers choose to abolish their union, then the quantity of autoworkers demanded will
rise. The supply of workers in other industries will fall.
China, Japan, and Brazil are growing very quickly because
they save and invest an unusually high percentage of their real income
If a country's saving rate declined, then other things the same, in the long run, the country would have lower productivity and lower real GDP per person.
true
Suppose that Orange Company announced that it hired a new CEO away from its successful competitor. The efficient markets hypothesis implies that the price of the stock should increase.
true
