Explain how the Harrod-Domar growth model, while extremely limited, provides important insights into the growth process
What will be an ideal response?
The model focuses only on the aggregate rates of savings and investment, and requires a single, "knife-edge" equilibrium growth rate. Nevertheless the essential roles of saving and investment are worth studying for their impact on growth.
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Which of the following is true of the segmented markets theory?
A) It assumes that borrowers have particular periods for which they want to borrow. B) It assumes that lenders always lend for short periods. C) It provides a good explanation for why yield curves usually slope upward. D) It assumes that instruments with different maturities are perfect substitutes.
Spending on newly constructed homes is part of the investment component of GDP
a. True b. False Indicate whether the statement is true or false
Which of the following is included in M1?
a. savings accounts b. money market deposit accounts c. money market mutual funds d. travelers' checks e. None of the above are included.
A supply schedule shows the relationship between:
A. demand and supply. B. supply and income. C. price and income. D. quantity supplied and price.