In the 1980s, one often-heard explanation for the low levels of net investment in the US and UK was that
a) developed economies had no incentives for acquiring new capital
b) investment opportunities were limited because the already large capital stock was inducing a low marginal product of capital
c) depreciation and obsolescence were so rapid that firms could barely keep up with demands for replacing existing capital
d) stock market participants sought short-term capital gains from market appreciations rather than long term dividends from investment
e) rapid price inflation was creating excessive investor uncertainty
d) stock market participants sought short-term capital gains from market appreciations rather than long term dividends from investment
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A higher population growth rate can potentially lead to a higher rate of growth in per capita real GDP if
A) it leads to an increase in the amount of dead capital. B) young workers replace older workers. C) there is a greater labor force participation rate. D) it leads to greater democracy in a nation.
China's current rate of GDP growth is quite rapid. Its current growth rate is probably three times that of the United States. However, the levels of pollution are much higher in China
Would you consider China to be better off than the United States given this information? Why or why not?
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises and GDP Price Index rises. b. The real risk-free interest rate falls and GDP Price Index falls. c. The real risk-free interest rate rises and GDP Price Index falls. d. The real risk-free interest rate and GDP Price Index remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?
a. capital b. consumption c. investment d. costs