Human capital refers to
A) the money people have.
B) the machines that workers have to work with.
C) the accumulated skills and training that workers have.
D) the wealth people have.
Answer: C
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Government stabilization policy would be unnecessary if the economy automatically gravitated toward
A. full inflation. B. full employment. C. full recession. D. an inflationary gap.
If the fundamental value of the exchange rate is ________ than the official (fixed) exchange rate, the country has an ________ problem, and it will gain reserves
A) less; overvaluation B) greater; overvaluation C) less; undervaluation D) greater; undervaluation
During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed. They argued that such a tax is "severely regressive." What is the economic interpretation of their statement?
a. The poor get ill more often than do the rich. b. The poor pay higher prices for medicine and drugs than do the rich. c. The poor pay a higher percentage of their income for medicine and drugs than do the rich. d. All consumers pay too much money for medicine and drugs. e. The sales tax discourages the poor from seeking medical treatment.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index and current international transactions remain the same. b. The GDP Price Index falls, and current international transactions become more negative (or less positive). c. The GDP Price Index rises, and current international transactions becomes more negative (or less positive). d. The GDP Price Index rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.