Which one of the following would count as investment in the GDP accounts?
A. Purchase of a new airplane by an airline.
B. Purchase of a U.S. government bond.
C. Purchase of 100 shares of Wal-Mart stock.
D. Purchase of an existing house.
Answer: A
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Refer to the following graph. The long run equilibrium price would most likely be
a. $1.80.
b. $1.60.
c. $1.20.
d. $0.60.
In a market economy, which of the following is most important if a worker is going to achieve high earnings?
a. hard work b. provision of goods and/or services that others value highly c. having a graduate degree in a field like history or sociology d. membership in a labor union
Congress and the President allow people to make greater contributions to tax-deferred savings accounts. Which curve in the market for loanable funds would shift, which direction would it shift, what would happen to the interest rate, and what would happen to investment spending?
It has been said that well-educated citizens are necessary for democracy. Discuss this idea in economic terms. What market imperfection might occur and what are the appropriate government policies to correct it?
What will be an ideal response?