What is "human capital"? How is it important in the determination of a worker's wage rate?
What will be an ideal response?
Human capital is the skill, education, and training that a person acquires. The more human capital a person has, the higher the person's productivity and hence the higher the person's value of the marginal product. A higher value of the marginal product increases the demand for the worker and leads to a higher wage rate.
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Which of the following is not a principal method of financing today?
A) common stock B) bond C) reinvestment D) the entrepreneur's wealth
If there is an excess supply of money, there is an excess
a. demand for bonds and the price of bonds will decrease b. supply of bonds and the price of bonds will decrease c. supply of bonds but the price of bonds will not change d. supply of bonds and the price of bonds will increase e. demand for bonds and the price of bonds will increase
Ginger and Maryann are lost in the jungle, where the only things to eat are mangoes and fish. Ginger can gather more mangoes per hour than Maryann and can also catch more fish per hour than can Maryann. Therefore:
A. Maryann should specialize in the activity for which she has a comparative advantage. B. Ginger should specialize in the activity for which she has an absolute advantage. C. there are no gains to specialization and trade for Maryann. D. there are no gains to specialization and trade for Ginger.
From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly faster than long-run aggregate supply, then the Federal Reserve would most likely
A) increase income tax rates. B) decrease income tax rates. C) increase interest rates. D) decrease interest rates.