Define gross investment and net investment. Discuss the relationship between gross investment and net investment
What will be an ideal response?
Gross investment is the total amount spent on new capital goods to increase the quantity of capital and replace the depreciated capital. Net investment is the amount spent on new capital that exceeds the value of the depreciated capital or, in other words, net investment equals gross investment minus depreciation. Net investment is equal to the change in the capital stock.
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Who is responsible for U.S. monetary policy?
What will be an ideal response?
The function of money that enables prices of goods and services to be quoted is called:
A) medium of exchange. B) store of value. C) unit of account. D) measure of power.
Determine how each of the following situations would affect the demand for current consumption, the supply of current consumption, and the interest rate.
(i) Cuban immigrants, who own no capital of their own, arrive in the country. (ii) A drought lowers farmers' productivity this year, but rainfall levels are expected to return to normal next year. (iii) Scientists announce that a new lubricant that will double engine life will be available next year.
Which of the following will most likely accompany an unanticipated increase in short-run aggregate supply?
a. an increase in real GDP b. an increase in the general level of prices c. an increase in the actual rate of unemployment d. an increase in the natural rate of unemployment