Earnings usually reflect a person's productivity. What are factors that cause differences in productivity across people so that earnings differ too?
What will be an ideal response?
Productivity differences reflect differences in talent, training, experience, and human capital. People with more training or experience earn more, as do people with more human capital. Finally, some people just have a greater ability for certain things and this makes them more productive.
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What are the private costs of driving an automobile? What are the external costs?
What will be an ideal response?
A ____ rate of total savings will lead to a _____ rate of capital formation.
A. low; high B. low; low C. high; low D. the rate of savings does not affect the rate of capital formation.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and current international transactions become more negative (or less positive). b. Real GDP rises, and current international transactions become more negative (or less positive). c. Real GDP and current international transactions remain the same. d. Real GDP rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which national income account should be examined to discover trends in the after-tax income that people have to save and spend?
A. Gross domestic product (GDP). B. Personal income (PI). C. National income (NI). D. Disposable personal income (DI).