Classical economists predicted that population growth would eventually reduce economic growth because they believed:
A. in the law of diminishing marginal productivity.
B. in the law of increasing marginal productivity.
C. that production involved increasing returns to scale.
D. that production involved decreasing returns to scale.
Answer: A
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The rate of interest charged by the Federal Reserve to member banks for reserves borrowed from the Fed is the
A. federal funds rate.
B. discount rate.
C. repurchase rate.
D. Q-ceiling rate.
The decline in U.S. housing prices starting in 2007:
A. had essentially no impact on the rest of the U.S. economy. B. led to a sharp increase in consumer spending on other good and services. C. was followed by a large increase in employment. D. prompted many to sell their houses, causing house prices to fall further.
Which balance of payments account records payments for imports and exports?
A) reserves account B) capital and financial account C) current account D) official settlements account E) trade account
In one Asian country, scientists developed a new technology that made housing construction more efficient. They saw increased production in housing and electronics. How did the development in construction most likely lead to an increase in electronics?
a. The government subsidized the electronics industry so it would not fall behind. b. It motivated electronics engineers to outcompete the construction engineers. c. Some resources previously used in construction were shifted to electronics. d. Both industries used the exact same tools and technology.