Using the expenditure approach, gross domestic product equals:
A. gross national product.
B. the sum of consumption, investment, government purchases.
C. the sum of consumption, investment, government purchases, and net exports.
D. gross national product minus net exports.
Answer: C
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Most economists accept the need for a required pension system because
A. economists believe that saving is good for the soul. B. people will save less than is optimal knowing that they can rely on welfare, and people may not have the information necessary to calculate their correct level of savings. C. people will save less than is optimal knowing that they can rely on welfare. D. people may not have the information necessary to calculate their correct level of savings.
A decrease in the capital stock would be expected to
a. decrease the labor force. b. increase the level of output. c. decrease real GDP per capita. d. increase real GDP per capita.
Which of the following is not a benefit to lenders/investors of financial intermediation?
a. More diversification than the direct market. b. More convenient than the direct market. c. Higher yield than the direct market. d. All the above are benefits to lenders. e. Lower risks than the direct market.
According to economic theory, how do people make decisions?
A. They make decisions in the same manner as their parents did. B. They make decisions based on their own self-interest. C. They make decisions by looking at what others have done in the same situation and then doing the opposite. D. They make decisions by looking at what others have done in the same situation and then doing the same.