Suppose the growth in GDP per hour resulting from physical capital in an economy is 1% and the growth resulting from human capital is 2%. If the annual growth rate of GDP per hour is 5%, the growth resulting from technology equals:
A) 4%. B) 3%. C) 2%. D) 1%.
C
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Player 1 and Player 2 are playing a game in which Player 1 has the first move at A in the decision tree shown below. Once Player 1 has chosen either Up or Down, Player 2, who can see what Player 1 has chosen, must choose Up or Down at B or C. Both players know the payoffs at the end of each branch.
What is the equilibrium outcome of this game?
A. Player 1 and Player 2 both choose Down. B. Player 1 chooses Up and Player 2 chooses Down. C. Player 1 chooses Down and Player 2 chooses Up. D. Player 1 and Player 2 both choose Up.
All of the following are instruments of fiscal policy except
A) rebate on payroll taxes. B) education tax credits. C) unemployment insurance benefits. D) an interest rate cut.
How does GDP account for something that was produced for sale in one year and sold in the next year?
A. It is counted in the first year, and anything that happens later does not count. B. It is counted in the second year. C. It is counted twice. D. It is counted as an addition to inventory (which is in business investment) in the year it was produced, and the markup is counted in the year in which it is sold.
The Fed is most likely to pursue
A. Numerous increases in the discount rate to tighten the money supply quickly. B. Frequent changes in marginal tax rates. C. Frequent adjustment of the reserve requirement. D. Use of open market operations as the primary mechanism to change reserves.