The output-capital ratio (Y/K) depends on the following four determinants. Which determinant of these four is most likely to be affected by government growth policy?
A) the nature of the production function
B) the depreciation rate
C) the growth rate of labor input
D) the growth of capital per person
D
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Refer to the figure above. When the real exchange rate is below R*:
A) net exports are negative. B) net exports are positive. C) net exports can be positive or negative depending on the value of R*. D) net exports are zero.
Jose and Julia were discussing the necessary components to achieve economic growth. Jose stated that the economy must include free markets, specialization and trade, and an ethical judicial system. Julia reminded Jose that another key component is
A) property rights. B) freedom of speech. C) a guaranteed high rate of return on savings. D) freedom of religion. E) democracy.
Information costs
A) are the costs of buying and selling financial claims. B) include the costs that savers incur to determine the credit worthiness of borrowers. C) include the costs borrowers incur to discover the best investments to make with the money they have borrowed. D) are zero in financial markets, but high for transactions carried out through financial intermediaries.
The unemployment rate does not reflect the true extent of the unemployment problem. Which of the following groups is not counted as unemployed in the official unemployment statistics?
a. The underemployed and the cyclically unemployed b. The underemployed and discouraged workers c. Discouraged workers and the frictionally unemployed d. The frictionally unemployed and the structurally unemployed e. The cyclically unemployed and the frictionally unemployed