Does education increase economic growth? Explain your answer
What will be an ideal response?
Yes. While the relationship is not easily quantified, but there does seem to be a positive relationship between education and economic growth. At the same time, however, higher incomes (from economic growth) cause individuals to consume more education, so the causality runs both ways. This is why we see such a large correlation between education and economic growth in the aggregate.
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Which of the following is NOT included in the money supply when the transactions approach is used?
A) currency B) traveler's checks C) money market deposit accounts D) transaction deposits
Suppose the equilibrium price of a gallon of milk is $4. If the government imposes a price floor of $5 per gallon of milk,
A) the quantity supplied of milk exceeds the quantity demanded. B) the quantity supplied of milk falls short of the quantity demanded. C) the supply increases. D) the market will not be affected. E) there will be a shortage of milk.
A temporary supply shock that raises prices
A) will cause the real interest rate to rise in the long run. B) has no long-run impact on inflation and output. C) causes output to fall in the long run. D) causes inflation to rise in the long run.
Costs that are borne solely by the individuals who incur them are
A. transaction costs. B. external costs. C. social costs. D. private costs.