Macro Exam 3
Primary economic function of the financial system is to
match one person's saving with another person's investment
if a japanese country opens a new factory in south korea, it makes
a foreign direct investment. the factory will make a bigger impact on south koreas gdp than on its gnp
investment in physical capital and human capital both have what
an opportunity cost
productivity is defined as the quantity of
goods and services produced from each unit of labor input
Countries that pursued outward oriented policies in the 20th century
include singapore, south korea, and Taiwan
If there are diminishing returns to capital, then
increases in the capital stock increase output by ever smaller amounts.
In the long run, a higher savings rate
increases the level of productivity
Even though japan had a higher growth rate of real gdp per person than the U.S. over the last 120 years
its level of real gdp per person in lower than that of the U.S.
What is not an example of physical capital
knowledge of workers
Proprietary technology is knowledge that is
known only by the company that discovered it
When a country saves a larger portion of its GDP than it did before, it will have
more capital and higher productivity
Long term bonds generally have
more risk so they pay higher interest rates
The single most important piece about a stock is its
price
If the government's expenditures exceeded its receipts, it would likely
sell bonds directly to the public
A nation's standard of living is determined by
the productivity of its workers