HW #8

As long as prices are rising over time, then

the nominal interest rate exceeds the real interest rate.

Which of the following is an example of human capital?

The things you have learned this semester

A policy that increases saving will

improve economic growth and health outcomes.

An increase in the saving rate permanently increases the growth rate of real GDP per person.

False

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

False

In a period of inflation real interest rates will be greater than nominal interest rates.

False

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

The first but not the second

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

True

An increase in a country's saving rate permanently raises its productivity.

True

The United Kingdom is

an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States.

An increase in the price of bread produced domestically will be reflected in

both the GDP deflator and the consumer price index.

Changes in the quality of a good

can lead to either an increase or a decrease in the value of a dollar.

Other things the same, a country that increases its savings rate will have

higher future capital and higher future real GDP per person.

In order to promote growth in living standards, policymakers must

protect property rights and maintain political stability.