An increase in a country's saving rate will tend to cause which of the following in the long run?
A. an increase in the unemployment rate
B. an increase in the rate of inflation
C. an increase in economic growth
D. a reduction in per capita real GDP
Answer: C
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Which of the following goods is likely to have an income elasticity of demand greater than one?
A) Salt B) Gasoline C) Diamond jewelry D) Bread
Switzerland provides a counterexample to the claim
A) nations are poor because they are subject to exploitation by nations with superior military power. B) the rule of law is necessary for economic growth. C) military power is the source of the wealth of a nation. D) central economic planning doesn't work.
The figure illustrates Sally's budget line and her preferences. Point ________ is Sally's best affordable point, and Sally prefers point ________ to point ________
A) A; B; A B) E; C; B C) B; A; B D) B; B; D
Which one of the following is NOT included in GDP?
A. A homeowner hires a cleaning service to take care of household chores she chooses not to do because of the demands of her job. B. A bicycle manufacturer pays an advertising agency to develop a new promotional campaign. C. You look after your neighbor's plants during her vacation in exchange for her agreement to feed your fish while you are gone. D. You purchase new tires for your old car.